What is an earnest money deposit?

An earnest money deposit is a sum of money that a home buyer pays to a seller to show that they are serious about purchasing the residential property in New York. The money given is held in a trust account, and can either be returned to the buyer if the purchase fails to take place or used towards the down payment of the home if it does. The amount of earnest money that is paid may vary, depending on the market, the location of the property, and the terms of the agreement. In New York, the typical amount may range from 1% to 3% of the total purchase price. A buyer should remember that while the deposit of earnest money is not legally binding, it will demonstrate that they are serious about the purchase and will help to show the seller that the buyer has the financial means to follow through with the deal. It is important for a buyer to pay the earnest money in a timely manner, as this will help the process to move along smoothly and can help to ensure that the buyer does not lose out on the purchase.

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