Why Do I Need My Checkbook to Write an Offer?

In PA, when you write a contract for the sale of property, it is accompanied by a check.  The sellers’ agent will usually like to see about 1-2% of the purchase price as a good faith deposit with the contract.  If you reach an agreement with the sellers, this money is held as an “earnest money deposit” in the escrow account of the listing brokerage, and is then brought to closing on your behalf.  So if you would have owed $5000 at closing for example, you would only owe $3000 since you had already given $2000.  The money is to show that you “in good faith” plan to purchase the property.  If you back out for reasons in the contract (like inspections or not getting a mortgage), the money is returned to you.  If the offer is not accepted, the check is never cashed and is returned to you.  The only way to lose a good faith deposit is to violate the agreement or to back out for a reason not set forth in the contract (like deciding the day before closing that you would like to buy the house next to your parents that just came on the market instead).  Make sense?

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