Page 31 - Ultimate guide to selling you home on your own
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21. HOW EARNST IS YOUR
BUYER
You probably know that buyers are What it really boils down to is this…
supposed to “put some money down”
on your house. This is “good faith” Get a sense of your buyer’s situation,
money, commonly known as “earnest abilities, needs, and preferences. Be
money.” And it’s usually part of their flexible (to a degree) about how much,
down payment, but not the entire or how little, they are putting into
amount. escrow during the deal. Ultimately, as
long as you feel it is an amount that
So, how much should you demand your particular buyer wouldn’t easily
your buyer put down at the beginning or willingly walk away from, you’re
of the deal?
probably safe.
The only answer is, “It depends.”
In case you aren’t aware, in most
You might hear people say it should be cases, this money isn’t just given to
5% or 10% of the purchase price. You you for you to put in your bank
might hear others say a thousand account. (We’ll get into that a bit more
dollars or maybe a few thousand in the next section.) Nor is it
dollars total. necessarily yours to keep if the deal
falls through or they decide to walk
But, the truth is, it really depends upon away. It might become yours to
the price of your home and your keep...but not necessarily.
buyer’s situation.
In many ways, this money is more of a
The higher the sales price, the more gesture of good faith. It shows that
likely your buyer will be to have a good your buyer is “earnest.” In some ways,
amount of money to put down. On it’s to protect you from your buyer not
lower priced homes, buyers often can’t having any skin in the game and just
put much money down. taking off on you for no reason.
But even on some higher priced
homes, a buyer may not have a lot of
money to put down and may be going
after a low down payment mortgage.
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