Why Do For Sale by Owners Receive an Earnest Money Deposit?
As a for sale by owner seller, you may come across the term earnest money deposit. This is usually a check that exceeds no more than 10% of the selling price. You may ask yourself, why someone would give you a deposit. A purchaser may give you an earnest money deposit when they make an offer on your home.
Many times a buyer will give an earnest money deposit to show the buyer that they are really interested in the home. Let’s face it, anybody can make you an offer and say they really want to purchase your home. When a person gives you a deposit, they are basically putting their money where their mouth is. They are exhibiting you they mean business.
As a for sale by owner, you will need to hold onto this deposit until everything has been worked through. If the buyer has an approval for the loan, this money will be used to go towards the purchase of the home. There may be cases where something does not go right and the deal falls through. If this happens, in most cases the earnest money deposit goes back to the buyer.
You need to keep in mind that just because you get a deposit, this is no way means it is a for sure sale. Selling a home can be a prolonged process that requires many things to be done. There are a lot of I’s to dot and T’s to cross. This is just a buyer’s way of letting you know that, even if you get other offers, they were willing to put down a deposit.
This is just one of the many things that you need to know before selling your home. As a for sale by owner, you are performing alone, and you need as to know as much information as imaginable. Even if this is your first time selling your home, you do not want to come off as you have no idea on what you are doing. You need to be well informed on how to address situations that can go on and realize what everything means.
Written by guest on May 8th, 2010 with
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