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Home Buying Tip #2

July 26, 2016

What is Earnest Money, and why is it needed?


The earnest money check is an important part of purchasing a home. It is usually paid in a personal check, and given to the selling agent shortly after the offer to purchase is accepted. The basic reason for this earnest money, is to show the seller that the buyer is serious about purchasing the property.


Without earnest money, a buyer could make multiple offers on many homes, taking them off the market until the buyer picks the best one. Sellers rarely accept an offer without earnest money being promised.


The amount of the earnest money depends on a variety of factors. If there are multiple offers, a larger amount can help the buyer to determine who is more serious about buying their home, often making it a stronger offer. With the market being as hot as it is right now, a larger earnest money check can definitely be a plus mark for the seller in your favor. Discuss your earnest money amount with your realtor, they have experience in this and can often help you determine what amount will help you move quickly toward purchasing your dream home.



Ron Meyer
GSF Mortgage Corporation
300 Patriot Dr.
Little Chute, WI 54140
(920) 788-9608
NMLS #222688 & 1018