You have decided that you want to buy a home, and know that it will require a down payment. But why does your agent ask you for a couple grand up front when putting in an offer? Earnest money is technically “Money paid to confirm a contract”.
In South Carolina, when you are submitting an offer on a home it is traditional practice to give the seller a check for about 1% of the purchasing price. This check is given to the buyers agent’s company, that they then deposit into a specific account for earnest money. This money is taken out of your bank account, and held until closing. At that point the earnest money can be used towards down payment, closing costs, or reduced off the purchase price of the house. For more information on earnest money, or any other real estate education related questions, please feel free to reach out to me personally.
Written by: Robert Judy