The Complete Personal Finance Handbook: Step-by-Step Instructions to Take Control of Your Financial Future

Author:Teri B. Clark
Language: eng
Format: epub
Publisher: Atlantic Publishing
Published: 2013-06-01T16:00:00+00:00

Earnest Money

Definition: Earnest money is a deposit you make when you make an offer on a house.

Earnest money is applied toward the purchase price if the deal goes through. If the deal does not go through, you can often get your earnest money back, though it depends on how the contract is worded. If you default on the contract, you can lose the earnest money.

After you sign the contract, make sure to have the inspection, survey, and appraisal performed quickly, or you can lose your earnest money.

After you have signed the contract and paid the earnest money, you will hire a professional inspection company to examine all the house’s structural systems thoroughly and give you a written report detailing any problems found. Their fee will be $250 or more depending on the size of the home. You can find inspectors in the yellow pages.

The inspection takes at least an hour, and you should attend so the inspector can show and explain problems to you. You will also pay $75 or more for a termite inspection. Your lender requires it. Assuming that any issues found in the inspection were resolved, it is time to talk with your lender again.

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