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Earnest Money

by The Schuman Team

 

 

The topic of earnest money comes up all the time with our buyer clients.

The rules regarding earnest money vary by state and it’s best to thoroughly read the purchase agreement to fully understand the details of how earnest money will be handled.

THE BASICS

To begin, let’s start with the basics. Earnest money, also known as "good faith" money, is not actually required by law in the State Of Ohio. It is, however, common and expected by the seller.

It is an amount of money that a buyer offers to the seller up front and is refundable in most cases if the deal doesn’t go through.

The money doesn’t actually go directly to the seller. It goes to a title company or real estate agency that holds onto the money until closing. Then, it gets applied to the buyer’s costs.

It is basically a way for a buyer to show a seller they are committed to moving forward with the transaction.

HOW MUCH IS ENOUGH?

The most common question we get involves how much money a buyer should offer as earnest money.  Unfortunately, there is not one specific answer. The general rule of thumb is 1-2% of the purchase price but it all depends on the situation.

If a buyer is in a potentially competitive situation, greater earnest money may make their offer more attractive than another buyers’.

The other terms of the offer, including price, dates and other contingencies, will also come into play. The earnest money is just one component of the overall offer, but could be deemed important by the seller.

CAN I GET MY MONEY BACK?

For the most part, a buyer is entitled to their earnest money back if a transaction doesn’t go through. However, there are always exceptions. We have seen rare cases where a seller was allowed to keep all or part of the earnest money, but the circumstances here were unusual.   

As long as you follow the terms of the contract, you shouldn't have any problems. Your agent and or their manager can also provide valuable guidance during the transaction.

Although earnest money is only one small part of the transaction, it does play a big role during negotiations and should be taken seriously.

Solon Market Report - October 2013

by The Schuman Team

 

 

 

Here is our official market report for  Solon for homes sold in October 2013.

SOLD HOME STATISTICS SOLON OHIO - OCTOBER 2013

Date                                         # of homes sold         Ave. Sales Price

October 2013                                  27                               $328,000

October 2012                                  23                               $286,022

YTD 2013                                      271                               $308,528

YTD 2012                                      224                               $304,509

 

SOLON LUXURY MARKET

October 2013                                 6                                  $728,715

October 2012                                 3                                  $607,667

YTD   2013                                    43                                 $654,320

YTD   2012                                    34                                 $636,624

*source NEOHREX ( Regional MLS )

 

COMMENTARY:

The real estate market continues to show improvement compared to last year. Both number of sales and average sales price are up in Solon this year, one of only a few suburbs in Northeast Ohio with that distinction.

While there are numerous factors that have helped make this a great year for real estate in Solon, low inventories continue to be a major influence. Currently, there are only 88 active listings. In past years, we would see 150+ homes for sale at this time of the year.

What this means is that buyers are screaming for new inventory and many have become quite frustrated. The buyers that really need to buy will snatch up a nicely finished home within days, provided it is priced fairly. If a home is not selling, price and condition are likely major factors.

Moving forward, we anticipate a natural slowdown through the rest of the year. However, when all is said and done, 2013 will be a strong year for Solon real estate.

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Contact Information

The Schuman Team
HOWARD HANNA REAL ESTATE SERVICES
3550 Lander Road
Pepper Pike OH 44122
Dan: 216-346-3235
Amy: 216-403-9189
Fax: 216-456-2333