Understanding Earnest Money Deposits
An Earnest Money Deposit (EMD) is a buyer’s guarantee to a seller that they are serious about purchasing a home. The EMD is the amount a buyer forfeits if they breach the contract and fail to close on the house. While not legally required in Michigan, it is typically expected. The deposit amount is negotiable and often ranges from 1-3%, with higher amounts for more expensive homes. A strong deposit can make your offer more competitive and assure the seller of your commitment.
Hear what the founder of the Integrity Team, Gwyn Daubenmeyer Has to say:
Missing deadlines for inspection contingencies: If you fail to complete inspections within the specified timeframe, your EMD could be forfeited.
Failing to provide required information for mortgage processing: Delays or omissions in providing necessary documentation to your lender can jeopardize your deposit.
Misrepresenting your financial situation or deciding not to proceed after satisfying contingencies: Any false information or a change of heart after meeting all contingencies can result in losing your deposit.