Monday, November 30th, 2009
JosephSmith asked:
What is an earnest money? It is also called good faith deposit. It is usually done by the buyer of foreclosed homes in Boston, those who are getting their properties from banks.
The earnest money should be deposited through an escrow agent. This means that the buyer cannot withdraw the money if he wants to back out from his offer, in the same way that the banks could not get hold of it unless the transaction has not been cleared or the offer of the buyer has been rejected. Nevertheless, it must be given by show commitment and interest on any of the foreclosed homes in Boston handled by the banks.
So how do you exactly work with earnest money deposits? Here are some tips:
1. Replace the deposit with a cashier’s check upon acceptance of the offer. Once your offer for the foreclosed property in Boston has been accepted, you then have to change your deposit to cashier’s check, which you are going to give to the bank.
2. Know the difference between down payment and earnest money. There is a difference between the two. Earnest money is paid to show commitment to the offer. The down payment, on the other hand, should be given once the offer has been accepted and you have to start paying for the foreclosed home. Second, the earnest money can be returned to you, should your offer be rejected by the bank. If it is accepted, the earnest money will then form part of your down payment to the home.
3. Do not deposit the check into the brokerage. If you want to skip the hassle or even having your offer rejected by the bank, make sure that you can address the earnest money to the owner of the title or the escrow company, even if you are not really sure who they are. These can be filled out later on. Keep in mind that the banks really do not have a lot of patience to wait for clearances. This normally happens when the brokerage will deposit the check to a trust account.
What is an earnest money? It is also called good faith deposit. It is usually done by the buyer of foreclosed homes in Boston, those who are getting their properties from banks.
The earnest money should be deposited through an escrow agent. This means that the buyer cannot withdraw the money if he wants to back out from his offer, in the same way that the banks could not get hold of it unless the transaction has not been cleared or the offer of the buyer has been rejected. Nevertheless, it must be given by show commitment and interest on any of the foreclosed homes in Boston handled by the banks.
So how do you exactly work with earnest money deposits? Here are some tips:
1. Replace the deposit with a cashier’s check upon acceptance of the offer. Once your offer for the foreclosed property in Boston has been accepted, you then have to change your deposit to cashier’s check, which you are going to give to the bank.
2. Know the difference between down payment and earnest money. There is a difference between the two. Earnest money is paid to show commitment to the offer. The down payment, on the other hand, should be given once the offer has been accepted and you have to start paying for the foreclosed home. Second, the earnest money can be returned to you, should your offer be rejected by the bank. If it is accepted, the earnest money will then form part of your down payment to the home.
3. Do not deposit the check into the brokerage. If you want to skip the hassle or even having your offer rejected by the bank, make sure that you can address the earnest money to the owner of the title or the escrow company, even if you are not really sure who they are. These can be filled out later on. Keep in mind that the banks really do not have a lot of patience to wait for clearances. This normally happens when the brokerage will deposit the check to a trust account.
Category Real Estate | Tags: Tags: Brokerage, Hassle, Patience, Trust Account,
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