Buyers Don’t Lose Your Deposit!

Here's how to avoid accidentally giving away thousands of dollars when you're under contract to buy a home. Yep. We're talking about something called your earnest money deposit. And trust me, you'll want to get this part right. I'm Amber Johnson with Pillar Real Estate. And today I'm breaking down what an earnest money deposit is, how it works and how to protect it so you can move forward with confidence.

So what is the earnest money deposit also called EMD. It's basically your way of saying, Hey, seller, I'm serious about buying your home. It's a good faith deposit. I get submitted once your offer to purchase is accepted. And no, it's not an extra fee. It's money that you'll use anyway for your down payment and closing costs. You're just paying it earlier in the process. There's no fixed amount or rule on how much the deposit has to be, but earnest money deposits typically range from about 1 to 5% of the offer price. You'll work closely with your agent to determine what the best deposit amount is for you and the situation. So, for example, on a $650,000 home with a 3% deposit, that's $19,500 and that amount gets held safely in escrow once your offer is accepted.

But here's the catch. If you back out of the deal after certain deadlines or for a reason that's not covered by one of your contingency safety nets, you could lose all or part of your deposit. That means that the seller may legally have the right to keep it. That's why having an experienced agent on your side makes all the difference. We'll make sure that your contract includes smart contingencies, like your financing inspections and appraisal. So if something unexpected pops up, you and your money are protected.

Want to feel confident and prepared when buying your first or your next home? Well, throughout the spring and summer, I'm hosting free virtual buyers seminars where I'll break down the homebuying process into clear, simple steps. No overwhelm, just real guidance DM me “buyer seminar”, and I'll send you the upcoming date so you can grab a spot that works for you or head to buywithamber.pillarrealestate.com for more tips tools and buyer resources to get you started.