What is earnest money?
- Earnest money is a cash deposit buyers make when they sign a contract to buy a house.
It makes the contract binding and signifies the intention of the buyer to complete the purchase.
At closing, the earnest money becomes part of the down payment. If the buyer defaults without
a good reason, as spelled out in the contract, the earnest money becomes payment for damages
suffered by sellers and their agents
What is a contingency?
- A contingency is a condition on the sale put into the contract by either the buyer or seller to
protect against specific eventualities. Examples of a few common contingencies are: a requirement
that the buyer obtain financing or sell the current home; the seller has a home inspection done; or
the seller repair certain items. Contingencies can be removed by an addendum to the contract, or
they can expire if a time limit is specified in the contract.
Tax deductible closing costs.
- The loan fee or points, even if paid by the seller, as well as the pro-rated mortgage interest
and property taxes, are normally tax deductible.
When do I find out how much everything costs?
- The title company will prepare a good faith estimate after all contingencies have been removed.
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