How to Play the Agreement Right to Make Sure Earnest Money is Protected
The earnest money deposit is seen as a necessary evil for many home buyers. They do not want to pay it. They would give an arm and a leg not to pay it. Yet, the average of about 10% of the total home price needs to go down upfront to pull the property from the marketplace and yield a commitment.
Why are home buyers so averse to paying the earnest deposit for homes for sale in poinciana fl? Aside from the fact that it is money upfront, the earnest deposit could potentially be money wasted. For one, the deposit has a window of opportunity. After a certain time passes, the deposit is forfeited. If the sale goes through, there is no worry. But, it is not unheard for a buyer to back out.
There are contingencies set in place which can help get the deposit back if the sale does not proceed. There are two common contingencies which can help protect a buyer when it comes to their hard-earned deposit.
The Inspection: The most common is the inspection contingency. In this example, a young couple has found an older home from the 50s. They place a deposit with the bank. After doing so, they realize the property has extensive termite damage. They can pull their agreement to purchase, and receive their deposit back (it should be within a certain window or time frame).
In this situation, the inspection will be run through the lenders. More specifically, the bank will have already reviewed the property before saying they will finance it. But, it is wise to have a personal inspection clause in the agreement in case anything pops up later.
The Financing: Susan and her husband have found a fantastic property from the homes for sale in Solivita and they want it pulled from the market. They place a deposit down contingent on the bank approving their new mortgage standards and terms. If the bank denies them, they get the deposit back and they move along. Sellers dislike this feature, but it is another way to pull a deposit back.
The earnest deposit is set in place to protect the home seller as well. For the most part, the earnest money is non-refundable. The above two unique situations can protect a buyer, but the deposit is there to make the seller comfortable pulling it off the market. It is the nature of the business.
