Is the Good Faith Deposit When Buying a Home Required?
By Sandy Flores
Special to Excelsior
If you are considering purchasing a property, you should seek the advice of a professional. There is no doubt that buyers are more comfortable with an agent they know, but it’s even more important to have the conviction that the agent you are working with is familiar with the area and has the necessary knowledge and experience, as these points play a very important when making such an important purchase or sale of a property decision factor.
When we are interested in purchasing a property and we are motivated by any particular which attracted us enough to make a bid, then your agent will help you prepare the contract which include the Good Faith Deposit you deliver together with their offer. This Good Faith Deposit will show that you are a serious buyer. In California contracts must have consideration to be valid, a minimum deposit is required.
When buyers execute the purchase contract, it specifies how much deposit is offering initially to support the contract, and how much money in total will be deposited prior to closing, and the type of loan and the amount financed if that case. Usually in California deposits range from 1 to 3 percent of the sale price, but is not specific, this is a very personal decision. Be careful who you will give this deposit. This deposit is delivered on behalf of the office title, escrow, or company representing the landlord or the buyer in the sale of the house, and it is their right to receive a receipt and a copy of the contract he signed.
Is this refundable deposit on cancellation? Most importantly, read and understand your contract, the pre-set clauses in some contracts may be replaced, why not sign anything until you are sure that you have no doubts about the contract. In California allowed refund your deposit if within the period specified in the contract in writing manifests a defect of which you were not informed, and in which the homeowner is not interested in solving it.
In the purchase agreement of the Association of Realtors in California is expressed average period of 17 days, so the buyer can perform all inspections, and obtain all necessary information about the property before the fixed term. Another important point is that the purchase contract determines the value reflected in the assessment by a professional, as well as obtaining and final approval of funding. These are situations that are beyond their control and for which you have no knowledge, until these processes are performed. This term can be changed by mutual agreement.
If you are requesting the cancellation of the buying process, it must be submitted in writing to the escrow or trust company or through your real estate agent.
The escrow company then extended the corresponding cancellation and this must be accepted and signed by both parties, specifying the total amount of the refund.
If an agreement is not reached, the deposit will be kept in escrow until a renegotiation is made.
Never give the good faith deposit directly payable on behalf of the seller of the property, or a particular person.
Extend the deposit payable to a third party or neutral that has the credentials and authorized state corresponding license, such as a Title Company, Escrow, Real Estate, etc.. This will give you peace of mind that this deposit will be deposited in a neutral account and under applicable laws and requirements that protect him.Get the sales receipt verifying the amount, date and name of the corresponding signature.
It is not recommended to authorize the use of this Good Faith Deposit before this process is over.
Remember that all contracts have legal implications, especially when it comes to buying a real estate agent house.A in general can help you understand various aspects of the transfer of property buying and selling, and to route you to guide all closing process and make this purpose a pleasant experience, but mainly beneficial for you.