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Ask the REALTOR®: What is earnest money?

By in Ask the REALTOR® with 0 Comments

Ask the REALTOR® is a new series in which I’ll answer your most commonly-asked real estate questions, with a new Q&A posting every week or so. If YOU have a real estate question for me, drop me a note here.

This week’s question: What is earnest money? Here’s the answer in this brief video, and don’t miss the transcript below.

(RSS subscribers, please click here if you can’t see the video in your feed reader. Thanks!)

Transcript:

Hi, I’m Cari McGee and this is Ask the Realtor. Over my just about 15 years in the business, I’ve received a lot of questions from buyers and sellers and the general public regarding all things real estate-related, and today I’m going to answer another one of them.

One of the questions I get from buyers is, “What the heck is earnest money?”

Earnest money is an indication to the seller that you’re literally earnest about this purchase. You’re not running around town willy-nilly making offers on houses. You are saying, “I care enough about this house and making it mine, that I’m willing to put my money where my mouth is.”

Earnest money, generally, in our area, is about 1% of the purchase price. So, say on a $200,000 home, you’d expect to put about $2,000 down in earnest money. That is not a hard and fast rule, and you can go ahead and put down whatever you put down, but then the seller has the option to ask for more so that they’ll feel more comfortable about the offer that you’re putting down. If you have more skin in the game, sometimes a seller will look at your offer more favorably.

So, that’s what earnest money is. If you have more questions about that or anything else, feel free to contact me in one of the following three ways: You can go to my website, carimcgee.com, and click the “Contact” button. Or email me, cari@carimcgee.com. Or text me, 509-430-5342. Thanks so much. Bye!

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About The Author
Cari McGee

My husband and I came to the Tri-Cities in 1994, and we thought it would be a temporary stop on our way to larger cities. He was a television sports anchor at the time, and we planned to go wherever the "next step up" took us. Twenty-plus years later, we're still here and we've loved every minute of it! We have two children now, and we've found the Tri-Cities area is a wonderful place to raise a family. It's a great place to do outdoorsy things -- I like to hike Badger Mountain or run along the river path. I also love reading ... by a cozy fire in the winter or a beautiful picture window in the summer (with the A/C on!). I've been a licensed Realtor since 2004. I earned my managing broker's license in 2016, which means I can run my own brokerage, or create a team of real estate agents and supervise them, which is exactly what I did when I formed the Cari McGee Real Estate Team in 2018! We have administrative and marketing personnel, as well as additional agents to serve you. I became a director of the Tri-Cities Association of Realtors Board of Directors in 2016, became Secretary/Treasurer of the organization, and was elected to Vice President in 2019. Want to talk about real estate? Click here to schedule a meeting with me!

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