What Is Earnest Money?

Buying a home can seem like a complicated and overwhelming process for anyone who is in the market for the first time. There are so many particulars that need attention. The team at Arrowhead Title, Inc. is here to make the process a little easier by filling you in on one piece of the real estate puzzle: earnest money.

What Is Earnest Money?
Simply put, earnest money is money you provide when you submit your offer to the seller - a deposit that shows the seller you are serious (or "earnest") about buying the home. Without this deposit, the seller may not trust you to follow through with the purchase and may not accept your offer.

How Much Earnest Money Do I Need?
There is no magic number for the amount of earnest money you should provide, but typically the amount ranges from 1-3% of the total sale price of the home. The amount of earnest money you put down should strike a delicate balance. If you put down too much, it may create complications with your mortgage application. If you put down too little, it may cause the sellers to think you are not serious about the purchase.

What Happens To The Earnest Money?
Your check for the earnest money will be held by an independent party - your Lake of the Ozarks title insurance agency. The check will remain undeposited until the sale of the home is complete, at which point it will be applied to the down payment on your loan (or towards your closing costs if you are getting 100% financing).

Will I Get My Money Back If The Sale Falls Through?
You will almost always get a piece of your initial deposit back if the sale of the home does not go through, but the exact amount you get back will depend on the reason the sale fell through and how late in the process it happens. 

Questions? Contact Arrowhead Title!
If you have more questions about earnest money or other aspects of buying a home at the Lake of the Ozarks, feel free to reach out to the team at Arrowhead Title, Inc. We would be happy to help!

 The Lake of the Ozarks' Most Trusted Title Company
Location: Lake Ozark, MO 65049, USA

Comments

Post a Comment

Popular posts from this blog

Title Commitment vs Title Report

Image
Do you know the difference between a title commitment and a title report? While these documents may sound similar at first, they actually serve very different purposes and should not be confused. As your trusted title company at the Lake of the Ozarks , Arrowhead Title is here to help clear up any misunderstandings you may have about title commitments and title reports. Title Commitments Title commitments are issued when someone is in the process of buying a home or piece of property. After the title search has been conducted (that is, after your title company has thoroughly researched the public documents for any pertinent information regarding the property), the next step is to issue the title commitment.  The title commitment is exactly what it sounds like: a commitment  to provide title insurance to the lender and the buyer under the terms described. The title commitment outlines the conditions and exceptions that will impact the title insurance policy. Conditions to
Read more

9 Fun Facts About Title Insurance

Image
Title insurance is a crucial part of buying real estate, whether a home, business, or commercial or residential plot of land. Without title insurance, your right to use and occupy your new property may be hindered by rights and claims asserted by others - potentially even years after the closing date. Despite its incredible importance, title insurance is largely misunderstood (if it's understood at all) in the general community. Arrowhead Title, Inc. is here to educate you on our unique industry by filling you in on these fun facts about title insurance. Fun Facts About Title Insurance 1.   Benjamin Franklin was the first person to come up with the concept of title insurance. 2.   Title insurance's primary focus is proactive, not reactive - it aims to prevent issues from ever arising in the first place. 3.   Title insurance is available in several other countries (not just the States). For example, it is used in Northern Ireland, Canada, Mexico, New Zealand, Austra
Read more

Why Would I Need a Title Search vs Owners and Encumbrance

Image
Purchasing your Lake of the Ozarks home can come with a few unexpected expenses.  When faced with the decisions of what title insurance to choose when buying your home, count on Arrowhead Title, Inc. , to help accurately answer the questions you may have.  O&E vs Title Search As a new home buyer, the question of whether to get a full title search or an owner and encumbrance (also known as a title report) may come up in your home search process.  It is important to first understand the difference between the two.  Owner & Encumbrance Owner and encumbrance reports are simplified non-insurance title reports designed for informational purposes only.  Also known as a property report, this report is a limited search of public records.  It does not provide any insurance. However, the title search does provide valuable information concerning the property such as the property’s most recent owner, taxes owed on the property, outstanding deed of trust, and possible liens. A
Read more