What is earnest money?
When you make an offer on a home, I will ask for a check to accompany it. In the Pittsburgh market, I typically recommend a deposit (earnest/hand money check) of 1% to 2% of the offer price. Earnest money is made in good faith which demonstrates to the seller that the buyer’s offer is genuine. Earnest money essentially takes the home off the market and holds it for you.
The check (or sometimes cash) is deposited in a trust or escrow account at the buyer's brokerage for safekeeping. If a deal is approved and the contract is final, the earnest money is applied to the down payment and closing costs. If the deal falls through, the money is usually returned to the buyer.
Important: if the terms of a deal are agreed upon by both parties, but then the buyer backs out, the earnest money may not be returned to the buyer. It is important that you are aware of any deadline that may cause you to loss your earnest money. As your agent, I will remind you of these deadlines to protect your earnest money and the ways we can protect it – such as offer contingencies.
Questions on earnest money? Email me at firstname.lastname@example.org