Judith Sutton ABR CRS IDS PMN ASP IAHSP SRES GREEN
Judy@JudithSutton.com 908 803-0472
EXPECT MORE
DUE DILIGENCE AND EARNEST MONIES
Due diligence and earnest money are both important concepts to understand when buying a home in New Jersey:
· Due diligence
A period when a buyer can inspect and assess a property to ensure it meets their needs. During this time, the buyer may pay a non-refundable due diligence fee directly to the seller. The fee is usually between $500 and $2,000, and is sometimes considered by the seller when deciding which bid to accept.
· Earnest money
A deposit that a buyer gives to the seller to show their commitment to purchasing the property. Earnest money is usually a percentage of the purchase price, typically between 1–3%. It's usually held in an escrow account of the attorney, and applied toward the purchase price at closing. Earnest money is refundable if the sale falls through for reasons specified in the purchase contract. Both attorneys sign-off on the refundable amount.
I can help explain these terms and procedures, but it's still important to read the paperwork and discuss all with your attorney to make smart decisions.
Here are a few questions that may help explain the difference:
How much down payment is used for a house in NJ?
The average down payment among New Jersey home buyers is somewhere around 10% of the purchase price. There are financing options available today that allow for an even smaller down payment when qualifying- however, sellers may pay attention to the amount declared.
The difference between due diligence and earnest money?
Due diligence is the fee paid directly to the seller. The fee is a negotiable, non-refundable fee a buyer may pay during the negotiated due diligence time.
Earnest money is money that the buyer gives the seller to show their good faith when making an offer to purchase the seller’s property.
How long does attorney review take when buying a house?
The typical attorney review period is 3-10 business days after both parties sign the purchase agreement. During that time, you and your attorney will need to decide whether to approve the contract or reject the contract as written.
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Judy@JudithSutton.com
COLDWELL BANKER...GUIDING PEOPLE HOME SINCE 1906
908 803-0472
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