Money talks: Make your deposit a selling point

 

Part 2 of Movin’ on up to bigger, better homes

 

HONOLULU ADVERTISER August 21, 2005

BY LISA SCONTRAS

Custom Publishing Group

 

It’s common practice to include an earnest money deposit with an offer to purchase real estate in Hawaii. Usually in the form of a check from the buyer, its purpose is to demonstrate that the intent to purchase the subject property is sincere and in good faith.

 

The amount of earnest money should reflect the buyer’s seriousness in purchasing the property. While a thousand dollar deposit used to be sufficient, some Realtors suggest that in today’s competitive marketplace, the bigger the deposit the better the offer looks. So it can be used strategically to show a buyer’s commitment and perhaps successfully position their offer setting it apart from others a seller might be entertaining.

 

Of course there are other strategies used by Realtors to make their offer more appealing if up-front cash is not available. A large earnest money deposit is just one of them.

 

The uncashed check is held by the Realtor until the offer is either accepted or rejected. If it’s rejected, the check is returned to the buyer. If the offer is accepted, the check is used to open escrow on the next business day.

 

Buyers should keep in mind that if they pull out of the sale after acceptance but before closing, their deposit may be forfeited. There is usually a paragraph which outlines what happens to the deposit in these cases, but it is a scenario that a prudent buyer should consider. Ask a Realtor any questions relating to the offer and the deposit.

 

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