The Process of Buying Your First Home IN Cabot Arkansas; Part 4

Last week we moved into writing a contract and some things that you need to discuss with your Realtor. Discount points are something that should be mentioned and evaluated to see if they are the best option for you. I would like to continue the discussion of writing contracts and some things to consider when writing them.

Once you figure out what to ask the seller to pay for in your prepaid and closing costs the next step will be thinking about earnest money or "good faith money". Some people do not understand this concept. I want to take time to explain it to you and why it is important.

Most sellers like to see earnest money because it lets them know that you are serious about the contract that you wrote to them. Basically earnest money is you saying I am serious about this contract, I am willing to stake x amount on it and if I do not go through with it you can have that money. A seller then knows that you are serious and you want to go through with the transaction.

What does that mean to you? You need to think about what a good amount is to put up to let the sellers know that you are serious. In Cabot earnest money rarely exceeds $500. Some times there is no earnest money required for a transaction. I generally have my clients start out with $250-$300 in earnest money. That is normally enough to let the buyers know you are serious.

How do you lose the money? It is hard for the buyer to lose the earnest money. Really the only time a buyer will lose earnest money is if they just decide in the middle of the transaction that they do not like the house. Other snags like not being able to get financing and the buyers house not selling if offer is contingent will not lose your money. As long as it is wrote in the contract that the offer is contingent upon financing and/or a home selling, buyers will not lose earnest money.

You should discuss this with the agent you are working with to determine the proper amount if any is needed. If you need an agent to work with or would like more Cabot ar real estate info, click on the link.

Good Day