Louise Lingerman's Blog
Have you heard the term “earnest money” but really aren’t sure what it means? Once you have found the perfect home and are all set to make an offer, there’s one more step that you need to take. That’s to make a deposit on the home you want to buy. This is known as an “earnest money deposit.”
The Purpose Of The Deposit
The deposit shows the seller that you’re serious about buying the home. It’s a measure that allows the seller to have some faith in you as a buyer that you’re truly moving forward with your decision; you’re ready as a buyer to make the financial commitment. This deposit allows the deal to begin on a solid basis without much question.
Is The Deposit Required Legally To Buy A Home?
From a seller’s perspective, a deposit keeps a buyer from changing their mind. If there is a significant amount of money involved, the seller sees the deposit as a way to keep the buyer locked in. This makes it easier for sellers to accept an offer.
How Much Is Expected For An Earnest Money Deposit?
These deposits don’t quite have a standard amount. The general rule is that they range from 1% of the home price up to 5%. The more expensive of a home that’s being purchased, the larger the earnest money deposit should be. In some cases, the seller may even ask for a certain amount of a deposit to ensure that buyers are serious. How much money you pay at once is often negotiable. You may be able to pay part of the money at one time and the other part at a later date.
New Construction Can Require Large Deposits
New construction homes can require large earnest money deposits- up to half of the purchase price of the home. This is because the construction costs need to be paid upfront and the bank wants proof that the units being constructed with loan money are being sold to buyers who can pay for the home.
New construction homes are often customized as well. It would be detrimental to a developer to make special changes to a home only for a buyer to walk away.
Getting The Deposit Refunded
As with everything in real estate, you’ll have a contract. If you don’t follow the terms of the contract, you risk losing your earnest money deposit. Two main reasons for buyers to walk away are a flopped home inspection or financing that falls through. Read your contracts carefully. Sellers sometimes state that deposits are nonrefundable after a certain number of days.
You need to be sure that you are covered as a buyer in the purchase and sales agreement. If you back out of a home purchase without good reason like a contingency included in the agreement) you could be out of luck when it comes to getting your deposit back.
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When it comes to home buying a home, there’s a ton of different information available out there. A lot of what has been presented as “fact” actually is quite false. These misconceptions could keep you away from achieving the very real dream of home ownership. Below, you’ll find some of the most common myths that you’ll find about home buying.
If Your Credit Score Isn’t Up To Par, You Can’t Buy
To get good mortgage rates, having a good credit score doesn’t hurt. You can still buy a home if you don’t have amazing credit. A low credit score means that your mortgage rates will be higher than the average. There are loans like FHA loans, that allow for you to get a loan with a credit score as low as 580. Don’t let a lower credit score discourage you from buying a home. If your credit score is low, there are plenty of things that you can do to help you fix the score in a short period of time.
You Need 20 Percent Down To Buy A Home
This is a long-standing myth about home buying. While putting down 20 percent on a home purchase saves you the extra expense of Private Mortgage Insurance (PMI), you can still be in the running to buy a home if your down payment is less than 20 percent. There are even some home loan programs that allow buyers to put as little as 0-3 percent down for the purchase of their home.
You Have To Make A Lot Of Money To Buy A Home
Your monthly income is one of many aspects of your financial life that’s considered when you’re buying a home. Home loans can be denied to those who make a large income just as easily as to those who have lower incomes. What matters is the debt-to-income ratio, which tells lenders how much debt a buyer has compared to the amount of income the buyer makes each and every month. Keep your debt down, and you’ll be in good shape to buy a home.
You Don’t Need To Be Pre-Approved To Get A House
Being pre-approved gives you an upper hand in the home buying process. Being pre-approved allows your lender and you to go through the entire process of getting a mortgage. When you find a home that you love, you’re able to breeze through the process of making an offer if you’re pre-approved. The pre-approval process is one of the most important aspects of buying a home.
If you’re prepared with knowledge, buying a home isn’t such a daunting process after all. Find a realtor you trust, understand your finances, and the rest will fall into place!
Congratulations on your recent home sale! Now, you just need to figure out how to tell family members, friends and other loved ones that you'll be packing up and moving out of your current residence.
Informing loved ones about a home sale may seem challenging at first. Fortunately, we're here to help you keep your cool as you tell loved ones that you've sold your house.
Here are three tips to ensure you can avoid the stress and headaches sometimes associated with informing loved ones about your decision to sell your home.
1. Get Ready for Questions
Loved ones have your best interests in mind, and as such, likely will have many questions about why you sold your residence.
What prompted you to sell your home now? How much did you receive for your home? And where do you plan to live in the future? These are just some of the questions that you should be ready to face from family members, friends and other loved ones.
Moreover, answer loved ones' questions as best you can. And if you are uncertain or uncomfortable about answering a question, you can politely decline to respond.
2. Keep an Open Mind
Things will move quickly after you sell your home. Although you may have plans to buy a new residence or relocate out of state at some point, you might still need time to finalize your next move.
Oftentimes, loved ones may pressure you to move in a certain direction following your home sale. But it is essential to keep the best interests of yourself and your family in mind at all times.
If family members or friends pressure you to make a move that makes you feel uncomfortable, let them know. Remember, your loved ones want you to be happy, and they should be willing to listen to your concerns after you share the news that you have sold your residence.
3. Operate Fearlessly
After you accept a homebuyer's offer for your residence, the toughest part of the home selling journey is over. At this point, you can finalize your home sale and move forward with the next stage of your life.
It takes a lot of courage to sell a house, and you should maintain this confidence as you tell loved ones about your home selling decision.
Regardless of how a loved one feels about your decision to sell your house, what's most important is how you feel about your choice. If you believe you made the best decision possible, you should feel good, even if family members or friends disagree.
When it comes to telling loved ones about your home selling decision, don't forget to reach out to your real estate for assistance. This real estate professional understands the challenges of informing family members and friends about a home selling decision and may be able to offer expert guidance. That way, you can remain poised and confident as you share your home selling news with others.
Whether you’re shopping for your first house or your next house, finding a listing you love is exciting. You browse the pictures, check out the property facts, share the link to your significant other, and maybe even schedule a showing.
With the exciting prospect of owning a new home that has all or many of the features you’re looking for, it can be easy to forget about certain details that matter. Most of us look for similar things in a house--close proximity to work, enough bedrooms, an upgraded kitchen, and so on.
In this article, we’re going to give you a list of things to investigate about the house you’re looking at to get a better idea of whether or not it’s the perfect match for you and your family.
1. Re-read the listing
If you’re like me and get lost in the photos of a home and forget to make note of the details, be sure to go back and check out the listing a second time. It will likely give you important details of the house that you overlooked on your initial visit.
Look for things like the year the house was built, information of the heating, ventilation, and air conditioning system, and the total acreage of the lot and square footage of the home. These things are hard to accurately represent in the listing’s pictures, but will likely be important to your decision of whether or not you should view the home.
2. Do your online research
The number of things you can learn about a home and neighborhood on the internet is astounding. We suggest that before you go to visit a home, you spend 10-20 minutes on Google researching the following topics:
School district ratings. If you have or plan to have school-aged children, you’ll want to know what your options are for your child’s education. It’s often a good idea to check out the local schools’ websites to see what
Commute times. With Google Maps and similar sites, you can plan out what your new commute will be and see how long it will take. You might find different routes that will save you time or avoid traffic (we could all use those extra few minutes in bed every morning). Google Maps isn’t always accurate when it comes to morning traffic estimates, but it’s a good place to start.
Amenities. Having moved into a neighborhood that has no grocery stores within a 20-minute drive, trust me--you’ll want to know what’s in the area. Use Google Maps to find stores, gas, schools, parks and trails, hospitals, and other things you’ll want close by.
Street view. While we’re on Google, use street view to take a remote look around the neighborhood. You’ll be able to see how the infrastructure looks--if the neighborhood is taken care of and if there are sidewalks that offer a safe place to walk or jog.
Crime ratings. Don’t get too caught up in this section. Crimes happen everywhere, but this is a good way to see if the area you’re moving to is a safe place
3. Don’t be afraid to ask questions
If, after all of your online research, you decide you want to go view a home, don’t be shy when you arrive. It’s understandable that you wouldn’t want to be a burden in someone else’s home. But remember--if you’re considering living there someday you’ll want to know as much as possible before making an offer.
Test the plumbing, ask about average utilities, and don’t be afraid to introduce yourself to neighbors and ask them questions about the community. The more you know, the better. Happy sleuthing!