Earnest money is a deposit that a buyer puts down when they make an offer to purchase real estate in Northbrook IL or anywhere in Chicagoland. It shows the seller that the buyer is serious about their offer, and is willing to commit some funds towards the transaction. The earnest money deposit indicates to the seller the buyer is serious about buying the property indicating the property will be off the market. Caroline Gau strives to be the best realtor in Northbrook by guiding her buyers how much earnest money makes a strong offer.
Typically, the amount of earnest money is a percentage of the purchase price, and can vary depending on the location and the type of property. In some cases, the amount may be negotiated between the buyer and seller. As a buyer’s agent Caroline Gau, Baird & Warner advises buyers what is suggested for a winning offer.
The earnest money deposit is held in an escrow account until the sale is finalized. At that point, the funds are typically applied towards the buyer’s down payment or closing costs. It may be strange to tell you that earnest money cannot be CASH. Really Caroline? Yes. This money needs to be sourced from a bank. You are not able to take money from under the mattress and bring it in for your earnest money. I joke that cash is king, except when it comes to sourcing the money 😜
If the sale falls through for any reason, the terms of the purchase agreement will determine what happens to the earnest money. In some cases, it may be returned to the buyer, while in other cases, it may be forfeited to the seller as liquidated damages.
It’s important to note that earnest money is not the same as a down payment. The down payment is a larger sum of money that the buyer will pay towards the purchase of the property, while the earnest money is a smaller deposit that shows the seller the buyer’s commitment to the transaction. Who do you know who is considering selling a home in Northbrook? Right now is a perfect opportunity to gain much interest from home buyers. We don’t know how long it will last into the summer months.
