Understanding The Earnest Money Deposit in Downtown Minneapolis, by MIke Weiland, Downtown Minneapolis Real Estate Expert.

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Once a purchase price has been established on a condo sale, the next question becomes, “How much of a deposit should I give?”  Individual real estate agents and brokers in the Downtown Minneapolis area may each have a different answer, but follow the same general guidelines.

The point of leaving a deposit with an offer to purchase a property is to let the sellers know you are serious or “earnest” about your offer.  That is why it is referred to as “earnest money.”  If a potential buyer did not leave any money with an offer they would not have any risk involved.  Money offered with the offer to purchase tells the sellers the buyer is serious about the offer.  There is risk involved for both parties.  In the Downtown Minneapolis area it is common for buyers to leave a deposit of between one and five percent of the purchase price.  Professional real estate agent Mike Weiland, of The Weiland Group of Edina Realty states under certain conditions a larger deposit is wise.  For example, if the purchase offer is weak, or if there are several offers competing against each other, a larger deposit may sway the sellers towards the buyer’s offer.  However, normally, the lower deposit is sufficient.

There are some risks when giving a deposit with a purchase offer.  However, states have minimized this risk with regulations and through the use of escrow companies.  Although the deposit “belongs” to the seller, it is held by either the real estate company or an escrow company until closing.  If the deal falls through it is easier to get the deposit back to the correct party.  In some cases that would be the buyer and in other cases it would be the seller.  One complication with using an escrow company is the parties involved need to be in agreement before the funds are released.  In order to protect your interest it is best to use a professional real estate agent or broker who specializes in the Downtown Minneapolis area. 

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 Minneapolis condos for sale, values, and more please visit the most complete website online dedicated to everything Downtown Minneapolis Condos at www.LivingInDowntownMinneapolis.com. Contact me, Mike Weiland & Elke Stephan with Edina Realty with any of your condo or mortgage related questions today. Call 612-735-6834 or email mike@mikeweiland.com.

P.S. To find the best deals on Downtown Minneapolis condos as well as insider information about privately available condos, click here!