You just got your offer accepted — now you're being asked to send thousands of dollars into escrow. So what actually happens to that money?
Your earnest money deposit, often called the initial deposit, is money deposited into escrow as part of your home purchase. In California, buyers commonly offer around 3% of the purchase price, although 3% isn't a universal requirement. For example, an $800,000 home × 3% = a $24,000 initial deposit.
If the transaction closes, that money is generally credited toward the funds you're required to bring into the transaction — it isn't automatically an additional $24,000 fee. If you cancel, whether your deposit is refundable depends on your purchase agreement, applicable contingencies, deadlines, and the circumstances surrounding the cancellation.
If you're thinking about buying a home in Orange County, reach out — Katherine is happy to help you understand the home-buying process.