Making an Earnest Money Deposit on a Downtown Minneapolis Condo
When an offer is made on a Downtown Minneapolis Condo, it's usually accompanied with a check. This check is what is known as an earnest money deposit, made to let the seller know that the buyer is earnest in his or her attempt to purchase the home. An earnest money deposit distinguishes serious buyers from those who aren't so sure about the purchase.
The deposit amount is different from one purchase to the next. Many factors can sway the amount of the deposit. In seller's markets, earnest money deposits are often larger than in buyer's markets. This is because Downtown Minneapolis Condos tend to have more inquiries in seller's markets. Thus, it takes a little more to convince the seller to accept a certain offer.
In a steady or buyer's market, you shouldn't make an earnest money deposit in an amount that is greater than 2 percent of the offer price. Once you have reached an agreement with the seller, the earnest money deposit is placed into an escrow account where it will stay until closing. At this point, both you and the seller jointly control the money. Usually when the deal closes, the deposit is applied to your down payment and closing accounts.
What happens if the deal falls through for reason? This is where sellers and buyers often disagree. Sellers sometimes feel that buyers should forfeit the earnest money deposit and they should receive the money. On the other hand, buyers contend that it was their money in the first place and the earnest money deposit should be returned to them.
Before anything can be done with the funds, any cancellation fees that apply are taken directly from the earnest deposit. After that point, the buyer and the seller must come to an agreement on what should happen with the deposit. It really doesn't matter who's at fault for the deal going wrong, since the money is held in a third party escrow some sort of compromise must be reached before the funds will be released.
The escrow can only release the funds when one of two conditions have been met either both parties provide a written authorization or an order is issued from a court of law. Obviously it is less costly and time consuming for the two parties to reach an agreement.
In some states there is a statute of limitations on which the escrow can hold the money without receiving a release authorization from the buyers. After this time period has expired, the law requires, in most cases, that the deposit be returned to the buyer.
There is a lot of free information available to you about buying, selling or investing in Downtown Minneapolis Condos or Minneapolis Lofts. For complete information about the Downtown Minneapolis Condo market including current condos lofts for sale, values, and more please visit the most complete website online www.LivingInDowntownMinneapolis.com dedicated to everything Downtown Minneapolis Condos. Contact Mike Weiland & Elke Stephan of The Weiland Group of Keller Williams with any of your real estate or mortgage related questions by filling out the form below.
P.S. Free weekly list of Downtown Minneapolis Condos including private listings and foreclosures in the most popular locations call the 24 Hour Recorded Information Hotline Now for details...1-888-391-9039 Ext. 126 or visit www.LivingInDowntownMinneapolis.com.
