How Buyers Can Use Earnest Money
Here are the basics you need to know about earnest money in a transaction.
Think of earnest money as a security deposit that shows your commitment to purchase the home. It tells the seller that you're operating in good faith. When the deal closes, the money you put down will go toward your down payment or closing costs. That's a win-win in my book.
How much earnest money should you put down, and when it is due? The bigger, the better. It can range from $1,000 to 10% of the sale price. I tell my clients to put down whatever they feel comfortable with, but then take it up a notch or two because we always want to put our best foot forward in this tough market.
"Earnest money tells the seller that you're operating in good faith."
In the state of Washington, earnest money is due two days after mutual agreement of an offer. You have to deposit your funds into the escrow account of the seller's choice by check or cash. You'll get your earnest money receipt, then move on to the next step in the process. We’ll discuss that next step in my next blog.
If you have any questions, please feel free to reach out to me. I’d love to help you in any way I can.