If you are making an offer on a highly desired home and the seller is likely receiving multiple offers for their home, it would be wise to include earnest money with your offer. You can choose the amount of earnest money "good faith" that you want to include with your offer. Generally, it will be a range from $200 up to $5,000 depending on the sales price of the home.

Here is the GOOD NEWS...this earnest money is STILL YOUR MONEY!

You are using "your" money as leverage to make your offer look better. If you put down earnest money and your offer is "accepted" by the seller you get that money back! However, you don't get it back as "cash in your hands," but it will be credited toward your closing costs amount.

For example: Your closing costs total $5000. You really want to purchase this particular home. Therefore, you tell your Realtor you want to put down $500.00 for earnest money. The seller accepts your offer! Your new closing costs amount is $4,500.00.

In close, earnest money is your money used by you to make your offer look "more" attractive to the seller. Suppose the seller has received 3 good offers, including yours and 2 others. Your offer is the only one that includes earnest money. Most likely, your offer will shine above the others, because of your serious intent to purchase the property.

This is not a guarantee, but a really good way to get ahead of the competition.

MISTAKE # 5

The buyer doesn't think about re-sale value before they buy. The average home buyer only stays in a home for 3 to 4 years before they move on to purchase another home (this is especially true for first time buyers).

This is VERY IMPORTANT! Please do extensive research about the area and location of your potential home before making the purchase. Ask yourself: "Will I be able to sell the property for a profit? Or will you suffer a loss? Never consider purchasing a property where the re-sale value is questionable.

There are several reasons that first time home buyers upgrade. You may be starting or have a growing family, you may get a better paying job, or may have to re-locate. Always think of your first home as an investment to use for your next home. Be wise. Think ahead and you will be just fine!

Ask questions, seek information, and learn from the experiences of others. These assignments will help you avoid home buyer mistakes!

Page 2 of 2 :: First | Last :: Prev | 1 2 | Next