Earnest money and buying metro Detroit homes

Why you do you need earnest money when buying a Metro Detroit home?

Earnest money is the deposit you make on the home when you submit your offer. Earnest money is deposited to show good faith and that you are serious about buying the house. The more you put down as earnest money the more serious it shows you are. The normal is $500- $5000 or 1 - 3% of the purchase price.

You want to put down the minimum amount yet show good faith. Ask your Realtor what you should put down, they will give you an idea. In Michigan the earnest money is deposited and held in the buyer's real estate company's escrow account once the offer is accepted. So be ready to have your earnest money check cashed once the offer is accepted.

After the offer is accepted the earnest money cannot be returned until a mutual release is signed by both the seller and the buyer. That is why it is important not to give too much money either. You must follow the contract, (purchase agreement). You can not just back out of a home purchase for no reason and expect to get your money back.

You will get your money back if you chose to back out the purchase agreement if the home inspection is not up to your standards or if the seller refuses to do the repairs needed or if you can't get a mortgage.

Earnest money is needed when buying a Metro Detroit home because a legal real estate contract must be in writing, have an offer, have an acceptance, and have consideration. Consideration is most cases is the earnest money check.

No seller will accept a purchase contract without having earnest money when buying a metro Detroit home.

Russ Ravary your Northville real estate agent, serving Wayne, Oakland, and Livingston Counties helping people buy and sell your their biggest asset.

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