The simple answer is: money paid to confirm a contract. It is meant to show you are earnest (sincere) about purchasing a new home.
The key thing to note about earnest money is that it is a deposit - a partial payment that you pay up front, but is applied towards the purchase of your new home at closing.
Earnest Money offers the seller (or homebuilder) protection by way of financial assurance - it says you are serious about buying the home.
Earnest money is usually a percentage (1%-5%) of the sales price or sometimes a fixed amount, but most often it is pre-determined before the home is listed for sale.
For Omega homes, it is usually $3,000 to $5,000, depending on the community (your Sales Agent will be able to answer all of your questions about your earnest money).
When choosing a new Omega home, paying your earnest money is the final part of the contract signing process. It’s required to make your contract complete. You’ll pay your earnest money right after you sign.
Is Earnest Money refundable?
It depends. If your contract has conditions that must be met, called contingencies, then your earnest money would be refundable if those conditions are not met. A loan approval contingency is the most common.
Understanding your contract and making sure you follow its terms is the best way to protect your earnest money.
Your Omega Sales Agent will provide you with a secure link to pay online. A personal check also works.
As a deposit, earnest money is applied towards the expenses that come with closing your home or towards your down payment. Your lender can help identify exactly where your earnest money will be applied.
This article is provided for informational purposes only. Omega does not warrant or guarantee the accuracy of the information provided and makes no representations associated with the use of this information as it is not intended to constitute financial, legal, tax, or mortgage lending advice. Omega Builders encourages you to seek the advice of professionals in making any determination regarding, financial, legal, tax, or mortgage decisions as only an informed professional can appropriately advise you based upon the circumstances unique to your situation.