What is the Earnest Money Deposit and Why do I need it?
The Earnest Money Deposit is a check written buy a homebuyer seeking to purchase real estate. The Earnest Money Deposit or EMD for short, is held in escrow (usually a non-interest bearing account) by either a real estate brokerage or a Title/Escrow Company. The EMD basically puts some weight on the contract as a greater incentive to move forward with the obligation of the contract.
So how much should you put down for the EMD and what does it go towards? Here in the Washington, DC area, the EMD should typically be 1-2% of the home purchase price but no less than $1,000. The more you put down towards the EMD the better your odds are for getting your contract accepted and ratified. The earnest money deposit is deducted from your account as soon as your offer is accepted and goes towards the closing of your home. So yes, it is essentially part of your downpayment and closing costs of the home but is not an extra fee. In the event that you do not go along with the purchase of the home there are some ways to get your deposit back, I’ll be covering that in a blog to come so “Like” and “Subscribe” so that you can get the latest information about the real estate market.
Clinton, MD Homes for sale and Real Estate Service. Sherman Hardy is your local Real Estate Expert for Washington, D.C., and surrounding areas. You now have free access to Washington, DC Ultimate Real Estate Search Engine! I'm ready to provide you with a custom home valuation if you're considering selling your home. Google or call me today and let’s discuss how I can help you. Sherman Hardy 301-659-5004