When a property is purchased, along with the executed contract, buyer is to pay EM and Option check.
Checklist for purchasing/selling a home include:
1. Negotiate the home and execute a contract
2. Turn in Earnest Money (EM) to title company and Option Period Check to the sellers
3. Get Option Period Check and EM receipted
4. Schedule inspections within the Option Period (OP)
5. Submit executed contract and receipted items to title company and lender (if financed deal)
What is Earnest Money?
An earnest money deposit is shown to the seller of the home from the buyer as a way to ensure the seller knows the buyer is serious about wanting and purchasing the property. It is also called a “Good faith deposit”, it is helpful to build trust with the seller. Your Earnest Money is credited back to you at closing.
Understanding Earnest Money
If an offer is made, both parties enter into a contract. The deposit is helpful to build trust with the seller. This contract contains provisions about how you’re going to increase your commitment level as you move through the buying process.
How much is the deposit?
Earnest money deposits are usually 1 percent of a home’s purchase price, depending on local market.
Is the Earnest Money Refundable?
Often your deposit is tied to other provisions of your contract, your deposit is refundable during your protection (or contingency) period, but after you release certain contingencies, the deposit may become harder to recover.
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