"Welcome to Rachel Gibson, REALTOR® podcast series! Today, we're diving into a crucial part of the home-buying process: the earnest money deposit. Whether you're a first-time homebuyer or just brushing up on your real estate knowledge, understanding earnest money is key. So, let’s break it down."

"Alright, let’s get to the basics. An earnest money deposit is a sum of money a buyer puts down to show they're serious about purchasing a property. Think of it as a good faith gesture."

"Usually, this deposit is made when the buyer and seller sign a purchase agreement. The amount can vary, but it often ranges from 1% to 3% of the purchase price. In some markets, it can be more or less." In the Kingman, AZ market it tends to be a standard $1000 in land and in housing it's between $1000 and $5000 depending on how competitive the house in question might be...high demand, higeher earnest money, so to speak.

"So why is it important? The earnest money deposit serves as a financial commitment from the buyer. It shows the seller that you’re serious and that you’re willing to back up your offer with a tangible investment."

"If the deal goes through, the earnest money is usually applied towards the down payment or closing costs. However, if the deal falls apart due to issues covered by contingencies in the contract, like failing a home inspection or financing problems, the earnest money is generally returned to the buyer."

"But if the buyer decides to back out of the deal without a valid reason, the seller may keep the earnest money as compensation for taking the property off the market."

"So, it’s crucial to understand the terms and conditions of your earnest money deposit. Make sure your real estate agent explains the contingencies and any scenarios that could affect your deposit."

"Remember, earnest money is a small but important part of the home-buying process. It demonstrates your commitment and helps secure your place in the buying process. If you have any more questions or need personalized advice, don’t hesitate to reach out to a real estate professional."

"Thanks for listening to this quick guide on earnest money deposits. Be sure to subscribe for more Mohave Desert Real Estate InformationSee you next time! Signing off

Rachel Gibson, REALTOR®