What is Earnest Money?
When you buy a home in the Greater Dayton Area and the Miami Valley Region, you might hear about something called “earnest money.” So, what is it, and why is it important? Let’s break it down so it’s easy to understand.
What is Earnest Money?
Earnest money is like a deposit that the person buying the house puts down to show they really want to buy the house. It’s a way to show the seller that you are serious and not just looking around. This money is usually given when you and the seller agree on a deal and sign the contract.
How Much Should You Pay?
The amount you need for earnest money can change depending on where the house is and how much it costs. Usually, in places like Dayton, it’s about 1% to 3% of the house’s price. In busy areas where lots of people want to buy houses, you might even pay more.
Where is the Money Kept?
In the Miami Valley Region, your earnest money doesn’t go straight to the seller. Instead, it is kept safe in an account by someone who is not involved in the deal, like a real estate company or a title company, until everything is finished.
What Happens to the Money?
If everything goes well and you buy the house, this money usually goes towards your down payment or the costs of closing the deal. But if something goes wrong, like if the house doesn’t pass inspection or you can’t get a loan, you usually get your money back.
If you decide not to buy the house without a good reason, the seller might keep your earnest money.
Why is Earnest Money Important?
For buyers: It shows you really want to buy and can even make your offer look better if there are lots of other people who want to buy the same house. For sellers: It gives them confidence that you are committed to buying the house.
Protecting Your Money
To make sure your earnest money is safe, always:
- Work with a real estate agent you trust who knows a lot about the Miami Valley area.
- Make sure your contract has conditions like passing an inspection or getting a loan.
- Check that your money is kept in a real, official account until the deal is done.
To Return to our Home Buyer Video Series click: HERE
For all of our Home Buyer Education and Resources click: HERE
Thinking of Moving to the Greater Dayton Area?
If you’re looking to buy or sell a house here, Jonas Helbert and Katie Masters of Team MVE are ready to help. They know the area well and can help you find your perfect home or sell your current one.
Contact Team MVE:
- Jonas Helbert: [Phone: (937) 626-4181]
- Katie Masters: [Phone: (937) 901-8177]
- Email: mve@streetlightrealtors.com
With Jonas and Katie, your house buying or selling journey will be smooth and simple. Let’s find your dream home together!
SLR Experts
Streetlight Realty is located in Washington Twp, OH, and serves the entire Miami Valley. Whether you are looking to buy or sell real estate, we have experts who can assist you in the process. You can call Jonas Helbert at 937-626-4181 or Katie Masters at 937-901-8177 with any Real Estate questions. We are here to help!