Home Buying in 13076>Question Details

Jewels, Home Buyer in 13076

i got aproved for a zero down home loan . do i still have to put $500 for the earnest money deposit to put in a offer on a house?

Asked by Jewels, 13076 Sat Nov 19, 2011

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Hi Jewels ~ In this area, yes you would still have to put an earnest money deposit down when writing a purchase offer. This is to show the sellers that you are infact serious about your offer and to show good faith that you truely want to purchase this home. If the offer is accepted, then the $500 gets deducted from your balance at the closing. If the offer is rejected, then you will receive your deposit back in full. In our office, we hold onto the $500 until it becomes an accepted offer and then deposit it. If in the event that it is not accepted, then do not deposit is and therefore it would not be taken out of your acct. I hope that this helps clear this up for you! If you have anymore help, please feel free to contact me anytime!
1 vote Thank Flag Link Mon Nov 21, 2011
Hi Jewels,

You don't 'have' to put an earnest money deposit in with your offer. However, if you want the seller to seriously consider and possibly accept your offer, you should. (Sellers use the earnest money deposit to gauge how serious buyers are with their offer and if they have other offers with earnest money deposits and yours doesn't, they will most likely accept the other offer(s) over yours - assuming all other conditions of the offer(s) are comparable). In CA, the earnest money deposit is usually 1%-2% of the purchase price of the property. The higher the earnest money deposit, the more serious the seller will consider the buyer to be. However, remember if you breach contract, you could loss the earnest money deposit.

Shanna Rogers
SR Realty
http://www.RealtyBySR.com
1 vote Thank Flag Link Sat Nov 19, 2011
You don't have to put down any earnest money but the seller will probably request that you do to show you are serious about the offer you are making. The earnest money will go towards paying your closing costs at the closing. Even though you have a no money down loan you will still have closing costs unless you ask the seller to pay them for you.
1 vote Thank Flag Link Sat Nov 19, 2011
Yes, an earnest money deposit is different from your down payment. Your earnest money deposit is for the home seller to consider your offer, and gets taken off the top of the selling price at the closing table. The seller keeps it, not the bank.

Good Luck house hunting!
1 vote Thank Flag Link Sat Nov 19, 2011
That 's your agents thing. Just put in your purchase offer. If you pay the $500 up front it can and should be written in the contract it is to be returned to you by the broker at the closing. Or apply it to any cost related if you desire during the closing, such as up front taxes you may have to pay etc.
0 votes Thank Flag Link Tue Feb 14, 2012
I can only answer for Long Island where we do not utilize this practice. We do not accept money just to put in an offer on a house.

I am surprised that anyone still does it.
0 votes Thank Flag Link Sat Nov 19, 2011
I can only answer for Long Island where we do not utilize this practice. We do not accept money just to put in an offer on a house.

I am surprised that anyone still does it.
0 votes Thank Flag Link Sat Nov 19, 2011
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