MONEY: The Real Bottom Line

There are three elements that will help determine the seriousness of a potential buyer and give you a clear understanding of how much money you will walk away with the day you sell the property.

3 Important Aspects of Money

There are three important aspects to how a real estate investor handles money with a home transaction that are important to understand.

Earnest Money Deposit

or EMD, is a good-faith deposit given by the buyer to the seller. It’s an amount of money that tells the seller a buyer is serious about purchasing the home. Other terms you may see are good-faith deposit and escrow deposit. The purpose of earnest money when considering any offer on real estate is to gauge how serious the potential buyer is; this becomes even more important when considering a cash offer. It gives the seller confidence in the buyer’s commitment to doing business, especially if they are willing to put non- refundable earnest money in the purchase agreement. Here’s how you know that you’re working with a serious cash buyer: ask them for non-refundable earnest money at the time the offer is accepted.

Net Offer

As a seller, it’s important to understand the costs associated with the sale of the property so that you know what your net will be. Traditional real estate sales, for instance, reduce the amount in a net offer due to expensive fees. When understanding a net offer on a home, it’s important to know – What fees will be coming out of your proceeds at closing? What costs (if any) are you expected to cover? How much is owed on your home’s mortgage,
property taxes, judgments, etc.?

Price

When factoring price, it’s important not just to understand the net offer or money, but also the emotional cost of selling a home. Only you know the emotional price tag that certainty, convenience, ease and peace of mind can provide. Not understanding how the monetary price and emotional price work together can cost you both money and emotional stress.

A wise seller needs to know how to use earnest money to their advantage, not the buyers’ – how to spot any hidden costs or fees associated with selling their home, what their real bottom line is, and the financial cost and emotional cost of selling their home.

Understanding the Money

If you want to have all the information you can get before finalizing a home sale, 1 800 BUY – HOUSES can connect you to the knowledge you need. To find out more, give us a call.