What is an Earnest Money Check?

An earnest money deposit (or good faith check) is a fraction of your down payment that tells the seller your a committed buyer, and funds your down payment. In almost every case you will need to write the check as soon as you sign the purchase contract.

How much should your earnest money check be?

In some real estate markets you may end up putting down more or less depending on the attractiveness of the selling price, property interest, and time-frames the seller has set. Before giving any seller your earnest money check, converse with your property law attorney in CT.

Some industry experts rarely exceed 3 to 5 percent of the purchase contract, while other say 2 percent maximum. Some sellers may even ask for a flat amount. The safest choice is to be advised by your CT real estate lawyer.

How do you make your earnest money deposit?

Depending on the market, you don't have to pay the entire deposit at once. When the buyer and seller sign the purchase agreement reviewed by your real estate lawyer, the buyer can issue a check for a fraction of the initial down payment, commonly between $1,000-$5,000, which will be followed by payment of the remainder of the earnest deposit within a week.

Your earnest money deposit will likely be placed in Escrow, to keep both sides of the transaction safe, and protected. Nevertheless, make sure to request a receipt for any earnest money handed over to a real estate lawyer, agent or a brokerage. 

Law Office of Chris Albanese
April 25, 2017