When working with first time home buyers I like to discuss the process as well as the costs associated with purchasing a home. Earnest money is one of the expenditures a home buyer can expect on their way to becoming homeowners.
Earnest money is a deposit intended to demonstrate to the seller of a property that you are serious about purchasing their property. The amount of the earnest money deposit can vary. I normally recommend a minimum of $1000 of earnest money for properties modest in value, $250,000 and below. Higher priced properties should receive earnest money deposits in line with their value. Some sellers require a specific amount of earnest money before considering accepting your offer. This is especially true with new home construction. Builders have guidelines for the amount of acceptable earnest money.
Why? Earnest means you are serious or sincere in your intentions. Providing an insignificant amount of earnest money with an offer may demonstrate to a seller that you are not serious or financially capable of successfully purchasing their property. So remember, when you are making an offer on your dream home your earnest money needs to reflect your level of commitment to purchasing the property. If not, you could risk losing your dream home to someone else.
Learning about the home buying process can be daunting. If you are a first time home buyer and interested in becoming familiar with purchasing a home in the metro Atlanta, GA area please feel free to contact me at: (678)523-1621 or Stacey@MetroATLRealEstate.com. You may also visit my website at www.MetroATLRealEstate.com.