If you’re like most homebuyers, whether you’re purchasing beachfront condo on Marco Island, a luxury estate on the edge of the island, or a Tigertail Beach home with a swimming pool, you’ll have to put down an earnest money deposit when you make your offer.
What is Earnest Money?
An earnest money deposit, which is also called a “good faith” deposit, is cash you put down to show a seller you’re willing to put your money where your mouth is.
How Much Earnest Money Do You Need?
There’s no specific requirement for an earnest money deposit, but as a general rule, your deposit should be between 1 and 2 percent of the home’s purchase price.
How to Make an Earnest Money Deposit
It’s important to know that you don’t actually give your deposit to the seller. You give a cashier’s check, a money order, or in rare cases, a personal check to your Marco Island REALTOR®®. Your agent then puts the money into an escrow account, and it’ll sit there until you close on the home.
What Happens to Your Earnest Money Deposit When You Close?
When you close on your new home, your earnest money usually goes toward your closing costs or your down payment.
Could You Lose Your Earnest Money Deposit?
In some cases, buyers lose their earnest money deposits. This most often happens when someone doesn’t have contingencies in their real estate contract to allow them to back out of the deal when something goes wrong.
Sometimes it’s okay to back out of a real estate transaction (and leave with your earnest money intact). Talk to your agent about the circumstances in your case to find out what you can—and can’t—do.
Are You Buying a Home on Marco Island?
If you’re thinking about buying a home on Marco Island, we’d love to help you find one that’s just right for your needs.
Call us at 239.821.7926 or get in touch with us online to let us know what you’re looking for. We’ll start searching right away. In the meantime, please explore our:
- Marco Island homes for sale from $100k to $200k
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