If you are planning to purchase a home somewhere in the near future, one of the more proactive steps you can take is to calculate out what money you will need for the home buying process so that you are not surprised with unexpected expenses down the line. Some of the expenses and fees that are charged during the home buying process can be rolled into your mortgage, but one that can't is what’s called the earnest money deposit.
The earnest money deposit is a deposit given by a prospective home buyer in order to show that they are serious about purchasing the home and showing good faith. Earnest money deposits are generally submitted at the time you submit your offer or within a set time frame agreed upon in the contract.
Earnest money deposits act as kind of a barrier to buyers who are not serious or who write frivolous offers on homes. Your deposit does not go to the seller themselves, but instead to an escrow company who then hold the deposit securely until the sale of the home is finalized.
About the authors: The above article was provided by the Horsfall Team. If you are thinking of selling or buying in the Ocala area, we’d love to use our knowledge and expertise to help you accomplish your goals.
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