Once a buyer settles on a home, they often show their commitment with an earnest-money deposit. But if they’re not careful, they could lose thousands of dollars.
Realtor.com® recently featured some of the biggest mistakes home buyers most often make with earnest-money deposits, including:
Failing to understand exactly what an earnest-money deposit is.
It is proof that a buyer is committed to completing the sale. Earnest money is used as credit toward the down payment and closing costs. It’s often a negotiable amount between the buyer and seller and usually about 1 percent to 2 percent of the purchase price, although it could be much higher.
Not offering up enough.
When a market is competitive, offering more earnest money may be one way to…