What's That Sound? Earnest Money Talks!

Prospective buyers just left the home you have For Sale. They said they would pay full price which sounded great. But then they asked you to hold the house for them until next month. They didn't offer to give you a deposit to hold the home, either. Do you think you really have serious buyers? Would you be willing to hold the home, unsold, for a month for such buyers?

Chances are what you have are just some serious "lookers" or "shoppers," but probably not real buyers. Sincere, motivated buyers understand that in order to purchase a home it is necessary for them to give the sellers (or their real estate agent) an "earnest money" or "good faith" deposit. This is usually an amount that would assure the sellers that their property was indeed SOLD, and which would ensure final settlement on the home.

It is generally thought that the more money tendered by buyers as "earnest money," the more serious and committed they are to completing the purchase.

Real estate purchase agreements often call for the forfeiture of the deposit if the buyers do not complete the purchase. Thus, it follows that insincere buyers won't want to risk a penny, while real buyers will be very cooperative in making a substantial deposit.

Don't hesitate to ask your buyer for "earnest money." It's your assurance of a completed sale.