Part of the role of a Grand Rapids real estate agent is to guide a buyer or a seller through the intricacies of a real estate transaction in Michigan. One step along the negotiation process is the earnest money deposit, which is paid by a buyer to signal their intention and ability to carry out the purchase contract.
The amount of earnest money is normally 1-2% of the purchase price of the home. In some circumstances, a buyer may offer a higher earnest money deposit to make their offer more attractive. The earnest money deposit is normally made as soon as both the buyer and the seller sign an offer to purchase a home. Since offers are often contingent on inspections, financing, and appraisals, there are normally clauses in the contract that specify circumstances when earnest money would be returned. Often the contract provides for forfeiture of the deposit if the buyer defaults on the contract.
From the buyer’s perspective:
From the seller’s perspective:
In Michigan, earnest money is kept in a separate escrow account (usually by the seller’s broker, but sometimes by a title company or another third party) until the sale is either completed or canceled. If the contract is not completed, both the buyer and the seller must agree before the earnest deposit is returned.
Whenever you’re buying or selling, it’s a good idea to get a refresher on each step of the home buying process, including earnest money deposits. Be sure to ask your Grand Rapids real estate agent to explain the circumstances around your earnest money deposit, and don’t hesitate to ask questions! Find an experienced Grand Rapids real estate agent with a history of happy clients , and make the real estate process easy on yourself!
Photo: David Goehring
Realtor Tom Sprich goes the extra mile to help you achieve your goals.
That’s why Tom constantly researches the real estate market and property values so your home is priced effectively from day one. Tom also makes certain the public knows your home is for sale by using innovative advertising and marketing techniques and The Sprich Group’s web site to attract potential buyers.
How we love our gift from the two of you! The drawing will always remind us of our Maryland home and the thoughtful "givers". I think we will name our new gift... "Done in a Day", as you sold our
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