EARNEST MONEY DEPOSIT (EMD)
When we find you that dream home the first step in the buying process is to submit an offer to the seller. A sample of the offer form can be seen below. When the offer is submitted to the listing agent, an initial EMD must be presented. The value of the deposit varies based upon a number of factors including multiple offer situations and overall negotiation strategy. It would be wise to plan on writing a check for at least $1,000.00.
An additional EMD is usually submitted at the time of the signing of the Purchase Contract. The amount of this deposit is often predicated upon the type of mortgage financing that you may be seeking. It is common that the additional EMD equate to a total of 5%-10% of the overall purchase price.
The EMD is always held in an escrow account either with the listing brokerage firm or with the seller's attorney. Typically, these escrow accounts are non interest bearing. The escrow funds will be released as part of the overall closing process. Unless a buyer executed an addendum (discuss in a future email) to the Offer from shown below, the funds that are given as part of the EMD will not be refunded to the buyer should they elect to not go through with the purchase. The EMD funds would be given to the seller under those circumstances.
Alright… I hope you have found this helpful, I will see you in a few days with another update on the process….
In the meantime if you have any questions, need anything, would like to go see any houses… etc… feel free to call/text or email us anytime!