Earnest Money

To show you are serious about buying a home, “earnest money” is a good-faith deposit you would make. This money is deposited after the seller has accepted your offer and is usually kept in an escrow account. When the sale closes, you can keep the cash or apply the money toward the purchase.

The earnest money you pay when purchasing a home can vary widely. Some home buyers pay as little as $500, while others pay several thousand dollars. The amount is negotiable between you and the sellers. It can depend on various factors, including the price of the home, the strength of the local real estate market, and your financial situation.

As a general rule, the earnest money deposit should be enough to show the seller that you’re indeed very serious about purchasing their house, but it shouldn’t be so large that it puts a strain on your finances. In most cases, earnest money deposits are a small percentage of the home’s purchase price, typically ranging from 1% to 3%.

The purpose of earnest money is to provide the seller with compensation if you were to back out of the deal through no fault of the seller and in violation of the agreements in the purchase contract. If that happens, the seller will keep the earnest money.

However, if you were to back out of the deal because a contingency in your contract was not met, in most cases, you’ll get your earnest money back. Most contracts include four common contingencies that allow you, as the buyer to terminate the agreement and remain entitled to a refund of the earnest money deposit:

  • The home inspection contingency: As the buyer you will determine the period to conduct due diligence on the condition of the home, including the home inspection. If the inspection discovers issues that are not acceptable to you, the contract may be terminated and your money will be returned as long as it is within the specified time in the contract.
  • The appraisal contingency: Applies to any offer that requires a mortgage to purchase the home. You would decide a date by which the lender conducts an appraisal. If that appraisal comes in below the purchase price in the contract, you would be able to back out and get your money back.
  • The financing contingency or mortgage contingency: This is used when the offer will require a mortgage to purchase the home. It’s a time that you would set to secure financing approval from your lender. If the financing should fail, you would be able to get out of the contract and your money would be returned as long as it is within the timeframe you had set in the contract.
  • The home sale contingency: You would have the ability to back out of any contract if your current home does not sell in time. As long as you had this included in the contract, you will get your earnest money back.

The Bottom Line: Earnest money exists for two primary reasons: to help a potential buyer strengthen their offer on a new home and to protect the seller from losses if a buyer isn’t able to follow through.

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Home for Sale? Don’t Forget Tik-Tok!

Whether you’re working with an agent or selling your home on your own, how your home is listed and marketed is crucial. MLS will get you the most exposure for your home because it reaches other websites and most people online. Ask friends and family who they know, and look online for the busiest Realtors using all the social media platforms, and then set up an interview to see how she will take advantage of all the opportunities to get your home in front of people.  It is now more important than ever that the person hired to sell any home utilizes the Internet and social media for promotion. Most American adults are online. More than 1 billion people in the entire world log in to Facebook on any given day. The potential to reach a huge number of people is exceptional.

Photographs:  The very best Realtor should help stage and prepare the home for professional pictures. All rooms should be clear of any clutter. The pictures MLS displays are usually grainy and poor quality. Homebuyers more times than not, begin the search for their new home online. Take advantage of this. Stand in the doorway to rooms and snap the photo shooting into the room.  There are never too many photos!

Facebook:  Now those beautiful photos need to be posted and announced, showcased, and marketed. A good Realtor might even host open houses via Facebook LIVE and interact with people who are watching. Another option is to make a targeted ad and pinpoint people by location, interests, behaviors, age, and more.

Instagram:  The world’s largest photo-sharing platform is the perfect place to showcase the photos taken of the home.  A good Realtor should know how to use hashtags because that is how Instagram helps users find relevant content. Spread the pictures throughout the day.

Tik-Tok: This is a can not miss for social media marketing! TikTok has a fast-growing real estate industry presence. The real estate agents on TikTok feature videos of luxury home tours, inspection fails, wealth management, and real estate agent tips. These short-form videos help homes stand out by essentially giving a virtual tour of the home for sale.

The Bottom Line: Everyone wants a Realtor who can be trusted and will do everything she can to get the most money for a home in the least amount of time. The Realtor is the homeowner’s advocate. The marketing of the home should be exceptional.  Beyond using the MLS (Multiple Listing Service) there should be professional pictures to use on websites and every social media platform available.

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New Year, New Home!

Should you consider putting your home on the market in January? It may seem that doing so during an off-peak season is not the most optimal but if you hire the right realtor who knows your market the best, even in January, you still can sell your home at a competitive price. Are you in the dark and cold Northeast or Midwest? There are plenty of reasons to be optimistic about your home selling.

There will be less competition! It’s well known that fewer homes are on the market in the winter. The warmer, longer days get more people out looking for homes in the spring, but after the new year when most people are back at work after the holidays, plenty of people are searching the web for their next big move. New year, new home. If you are serious about selling your home, get it listed online and marketed early to ensure you get this audience!

The experience of the realtor you hire is critical in most markets all year long, but because the dark winters are not the highest-selling months, you will need the best on your team. Pricing your home can be complex and you don’t want to scare off buyers by pricing too high. On the flip side, even pricing too low will cause buyers to wonder what’s wrong with your house. Whether true or not, a home on the market in the winter can lead buyers to assume that the seller is desperate to sell. Lowball offers may come in believing that the home will sell for any price. Buyers house hunting during this non-traditional time of year can often mean they are eager to buy and more willing to negotiate the price.

The real challenge might be to help dress up your home during the dreary weather. To help make your home feel more welcoming, shovel the walks, add outdoor illumination along paths, light candles indoors, add cozy throw blankets, and have holiday-type smells such as cinnamon or cookies, but take down any holiday decorations.

Beware that during the winter, any problems you may have in your home can become more prominent including drafts and leaks. To help lessen these potential problems, crank up the heat so buyers feel toasty warm and will be less likely to notice any issues.

The Bottom Line: It’s certainly possible to sell your home in the winter especially if you have a great realtor with a marketing plan. Someone who will get beautiful pictures inside your home to showcase online since most of the shopping will be first on real estate websites.

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Realtors and Closings

Complications and setbacks can come when buying a home, or it can go remarkably smoothly and fast if it is planned carefully.  Choosing the best realtor to be on your team is the key to success at closing. She will stay focused and be the voice of reason during the process at closing and will make sure all parties have completed any unfinished business before coming to the closing table. Here is what you should expect from a realtor: 

Repairs: The status of all repairs that were to be made on the home should be checked the day before closing. Confirming that anything that needs to be fixed has been completed. If there was an arrangement for repairs to be taken care of after closing, the realtor will have all necessary paperwork showing this as fact.  A final walk-through should be done with the buyers. The realtor must make sure that the condition of the property is as promised and all their items are removed.

Title Insurance:  The title company you have hired should be certain that there is a clear title on the home and that the property can be transferred without obstructions.  Should any title issues include judgments or liens, they must be settled before the hour of closing.  The moment of truth in a real estate transaction happens at the closing table. Title First Agency will work hard to ensure a seamless experience for you and your clients. From contract to closing, we handle all the details to help a transaction run smoothly and close on time. 

Financing: The lender should be contacted the day before the closing to be certain that all the documents they need have been received. Occasionally, the closing is delayed due to one document or one final verification.  The interest rate for the loan should be locked as well as the final mortgage and monthly payments.  A good realtor will make sure the buyer has all the funds available and ready to close.  Having everything in hand the day before gives both the buyer and the seller 24 hours to review everything and have any questions ready, errors noticed or points not understood addressed. 

The Bottom Line: Find a realtor who has a history of making sure the buyers are ready for the closing. First-time buyers, especially, don’t always realize all the people that could be at the closing table, and all the paperwork there will be that needs their signature. The buyer needs a cashier’s check or arrangements made to wire the closing funds to the escrow company.  The seller should bring all the keys, garage door openers, alarm codes, and any other controls to the settlement. A good realtor will take care of little things such as confirming that all utilities have been disconnected by the sellers and that the setup is ready for the buyers upon closing. 

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