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Monday, July 9, 2012

Understanding Real Estate: What is Earnest Money?

Earnest money deposit (EMD) also called good faith deposit is a deposit towards the purchase of your home.  When you make an offer on a property, your Selling Team agent will ask for a check for your earnest money deposit.  The amount put down varies from transaction to transaction.  Typically, EMD is a minimum of $500.

Photo Courtesy of Jim Dolanch

 If you are making a cash offer on a bank property, the seller normally will require that the EMD be 10% of the sales price.  The higher the dollar amount of the EMD shows a more serious interest in the property.  In the State of Michigan, your agent must deposit your EMD check in an escrow account.  Many times, local Title Companies hold the EMD until it is time to close on the transaction.  Then, this money is applied towards your buyer closing costs.
Posted by at 3:30 PM
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1 comment:

  1. Title Insurance QuotesJuly 11, 2012 at 1:04 AM

    Hi,

    If you are going to invest in the real estate market, it is not enough for you to know the things that will help you find the best property. You also need to make sure that you are aware of the things that will help you manage your assets without spending a lot of time and effort.

    ReplyDelete

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