Mr Williamsburg, Revolutionary ideas on real estate!Hampton Roads Virginia

Answer : Earnest isn’t a person.  An earnest payment (sometimes called earnest money or simply earnest, or alternatively a good-faith deposit) is a deposit towards the purchase of real estate made by a buyer to demonstrate that he/she is serious (earnest) about wanting to complete the purchase.

Earnest money is an important factor when you’re making an offer on a house. The “earnest money” is the deposit that shows the seller you are serious about the purchase. The money opens the escrow and can be applied to the buyers’ down payment or closing costs.

The earnest money amount is negotiable The amount varies depending on the price of the house and strength of the market. Starting amounts for earnest money deposits are typically $1000 for homes priced at $250k or less. Homes priced over that will usually require a larger required escrow deposit. Although earnest money is not required by law in most states, it is standard practice in our real estate transactions.
Some new home builders require much larger deposits. As much as 7% or more of the purchase price.

When the seller accepts your offer the earnest money is deposited in a bank account and held until closing when it is then applied to your closing costs or towards the purchase price. Most Purchase Contracts stipulate under what conditions your earnest money will be returned if the contract fails.

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