Making an Earnest Money Deposit in Salt Lake City Utah

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March 31, 2011

When an offer is made on a house in Salt Lake City Utah, it's usually accompanied with a check. This check is what is known as an earnest money deposit, made to let the seller know that the buyer is earnest in his or her attempt to purchase the home. An earnest money deposit distinguishes serious buyers from those who aren't so sure about the purchase.

The deposit amount is different from one purchase to the next. Many factors can sway the amount of the deposit. In seller's markets, earnest money deposits are often larger than in buyer's markets. This is because properties tend to have more inquiries in seller's markets. Thus, it takes a little more to convince the seller to accept a certain offer.

In a steady or buyer's market, you shouldn't make an earnest money deposit in an amount that is greater than 2 percent of the offer price. Once you have reached an agreement with the seller, the earnest money deposit is placed into an escrow account where it will stay until closing. At this point, both you and the seller jointly control the money. Usually when the deal closes, the deposit is applied to your down payment and closing accounts.

What happens if the deal falls through for reason? This is where sellers and buyers often disagree. Sellers sometimes feel that buyers should forfeit the earnest money deposit and they should receive the money. On the other hand, buyers contend that it was their money in the first place and the earnest money deposit should be returned to them.

Before anything can be done with the funds, any cancellation fees that apply are taken directly from the earnest deposit. After that point, the buyer and the seller must come to an agreement on what should happen with the deposit. It really doesn't matter who's at fault for the deal going wrong, since the money is held in a third party escrow some sort of compromise must be reached before the funds will be released.

The escrow can only release the funds when one of two conditions have been met either both parties provide a written authorization or an order is issued from a court of law. Obviously it is less costly and time consuming for the two parties to reach an agreement.

In some states there is a statute of limitations on which the escrow can hold the money without receiving a release authorization from the buyers. After this time period has expired, the law requires, in most cases, that the deposit be returned to the buyer.Salt Lake City Utah Buyers Sometimes Wonder Are Home Inspections Worth The Money?

Have you ever wondered if home inspections are worth the money? According to Salt Lake City Utah real estate agent Kathy Opolski, the answer is emphatically YES. There are so many great reasons to have an inspection, but there is a lot of risk if you don't have one.

The reason for having a home inspection is to get a detailed idea about the overall condition of the Salt Lake City Utah home you are considering buying. This will include all of the major components all the way down to the doorbell, and everything in between. In fact, you will be shown things that you would never consider checking.

If a problem is discovered that requires attention then you will have the opportunity to enlist an expert as to how extensive the repair will be. This eliminates any defects being hidden by the sellers- either intentionally or unintentionally. Without an inspection you would be required to take the seller to court and prove that they knowingly sold the home with a problem. The burden of proof would be up to you.

When the inspection is complete you should receive a written, detailed report that analyzes every part of the home. It will highlight every area of concern, from current problems to potential ones. This is an invaluable tool to decide if the home is worth the money you are willing to pay. Unless you are a trained inspector yourself there is no way you can completely check every part of the home.

Your highest priority is finding a good inspector. You can easily find an inspector, but a good one is another thing. You want to make sure that they are certified with UT guidelines. They should belong to at least one certification agency that specifies guidelines that should be followed. And it is imperative that they are bonded and insured.

When you have an inspection you should expect it to last approximately 3 to 4 hours, if properly conducted. This isn't an unreasonable amount of time to have the home checked out thoroughly. In most states, if a problem is found and you feel that it is a deal breaker for you then you will the opportunity to back out of the contract. Of course, your Salt Lake City Utah real estate should be able to advise you on this.

For more information about choosing the right home inspector in Salt Lake City Utah, contact Kathy Opolski with RE/MAX Associates at 801-518-4599 today.

There is a lot of free information available about buying, selling or investing in Holladay and Salt Lake City, Utah real estate. For complete information about the Salt Lake City real estate market including foreclosures, short sales and more, visit the website dedicated to everything Salt Lake City Utah real estate.

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If you or someone you know are in need of a competent and caring real estate professional in or near Salt Lake City, Utah, I will be happy to help, just call me at 801-518-4599.