HI MICHELLE - TO ANSWER YOUR QUESTION '"WHERE DOES THE EARNEST MONEY COME FROM" - THE EARNEST MONEY COMES FROM THE BUYER TO SHOW THAT YOUR INTENTIONS ARE SERIOUS ABOUT THE PURCHASE OF YOUR NEW HOME

Escrow money is an amount of money offered by the buyer as a form of deposit and indication of the buyer's serious intentions regardig said property. It is submitted with your written offer and held by recognized and insured agent authorized to maintain these funds.

At closing the escrow money is figured into the closing as a credit to you, decreasing the total amount due at closing.

Escrow money is cash submitted bu the buyer not the lender.

Michelle -

You deposit earnest money into the broker's account to show "good faith" in your contract. This sum is applied as a credit to you at closing. It also serves to tie you to the contract and protect the seller, it can be forfited if you fail to live up to the terms of the agreed upon contract. Obviously there's more and your agent should brief you fully on that -

Hank

Michelle,

My colleagues have provided great answers to your question. It bears reiterating, however, how essential it is that YOUR agent be involved in crafting an offer to be presented to the listing agent who represents the seller. Your agent will ensure, among other things, that your earnest money deposit will have the highest level of protection in the event that an event occurs that is unacceptable to you, the buyer. Our offers often have several special stipulations included specifically for the buyer's protection which include the terms by which the buyer may be entitled to a return of his or her earnest money and that is often where the negotiations begin. Upon a meeting of the minds, the contract is signed by all parties and the earnest money is then deposited.

All my best for a successful home search.

Solomon Greene
REALTOR® / Consultant - Keller Williams Realty Atlanta Partners

Earnest money is offered by the buyer to show the seller the buyers good faith and intention to purchase the home. The earnest money is deposited into the brokers escrow account once the contract is binding meaning all parties have signed an accepted contract. A lender nor a Realtor can offer earnest money on behalf of a borrower. In Georgia, the amount offered is negotiable. The earnest money is credited back to the buyer on the closing statement at closing. For example, let say you are purchasing a $100,000 home and you have provided $1000 earnest money. Lets say your closing cost and down payment equal you bringing $6000 to closing to close the property. Your $1000 is credited so now you only have to bring certified funds for $5000...make sense?

The earnest money is the sellers protection that you will not default on the contract. If you default then the seller could be entitled to the earnest money for damages. Default would mean that you are past all contingencies including financing contingency and you change your mind and refuse to close. Default could also be that you are failing to cooperate under the contract not getting loan docs to your lender etc. There are different contracts used so read your contract carefully so that you know what to do not to default. My advice would be to hire a great agent to protect you with your purchase and provide you with contingencies to ensure that you receive the earnest money back should the home not pass inspections etc. Contingencies giving you ample time for inspections, discovery, and loan processing.

Best of Luck!

Hi, Michelle,

Earnest money is put up by the home buyer, and acts as an act of good faith that you are going to consummate the deal. The money can be forfeited if you break the contract, but will be credited to you at closing if you buy the house. For example, if you are purchasing a home that is $100,000, your $1,000 earnest money will reduce the amount owed to $99,000 (keep in mind that there are other fees associated with buying a house, like taxes, insurance, closing costs, etc).

When you are the buyer, it is ABSOLUTELY CRITICAL to craft any offer so that your earnest money will be returned to you if the seller doesn't go through with the deal or if there is something that comes up during the inspection that would prevent you from wanting to go through with the deal. Your realtor will be on top of making sure that this is done in a way that protects you, and explaining under what circumstances your money would be at risk.

Best of luck to you. I specialize in land and home sales in Coweta and Fayette Counties, so if you're looking for someone to represent your interests throughout the process, I'd love to "interview for the job".

Thanks,
Jackie Campbell
The Campbell Team at RE/MAX Results