Buying a Home: What Is Earnest Money?

earnest money

There are a lot of expenses involved with buying a home. Although a home mortgage will cover a lot of the home’s price, you’ll also be responsible for making a down payment as well as paying for closing costs. However, one upfront cost you may not be familiar with is the earnest money deposit.

What Is Earnest Money?

Earnest money is commonly referred to as a good faith deposit. Essentially, it’s a sum of money the buyer puts into escrow after a sale agreement has been reached. Earnest money shows the seller that the buyer is serious about the purchase. It can prevent the buyer from making bids on multiple houses and reduce the risk of the sale falling through.

After all, sellers must relist their homes if a sale doesn’t go through and can end up losing a lot of money as a result – especially if they rejected other offers that were on the table.

How Much Earnest Money Do You Have?

The buyer will put around 1-3 percent of the home’s purchase price into escrow. If the buyer backs out because one of the contingencies wasn’t met, the earnest money will be returned. If buyers back out for no reason other than they changed their minds, sellers will keep the earnest money as compensation for their time.

If the sale does go through, then the earnest money will usually be applied to the down payment or closing costs. It’s not an extra expense but a deposit that shows the buyer is serious. It will be applied towards an already existing expense.

If you’re buying a home, expect to put down some earnest money. For more home buying tips, contact us at Randy Lindsay today. 

Selling a House to a Family Member: 3 Tips

Selling a house is rarely an easy process. That’s why the option of selling your house to a family member can be particularly appealing. Not only will you sell it quickly, but you’re selling to someone you care for who will appreciate your home.

However, there are risks involved. If you don’t do things the right way, you could end up damaging your relationship. Be sure to keep the following three tips in mind when selling a house to a family member:

  1. Establish the logistics: Sit down with your family member and determine the logistics of the sale, such as what professionals will help (including agents and lawyers), what the timetable of the sale should be, and more. Doing so will help avoid confusion and miscommunication.
  2. Get an appraisal: Whether your family member is planning to take out a mortgage or not, be sure to have a professional appraisal of your home before you strike any agreements. The last thing you want is to learn you’ve priced the home too high or too low. If the value of the house doesn’t match the agreed-upon price, there could be problems between you and your family member.
  3. Work with a real estate agent: You might be tempted to work without an agent since you’ll be dealing with someone you know. However, it’s a good idea to have an agent as an intermediary when it comes to the home buying and selling process. An agent can help with negotiations so you don’t strain your relationship.

Selling your house to a family member can be beneficial to all involved. Be sure to use these tips to avoid potentially straining your relationship. 

For more home selling advice, contact us at Randy Lindsay today.

5 Questions to Ask When Choosing Movers

Finally closing on a new home can be an exhilarating experience, especially since the stressful home buying process is finally over. However, you’re not out of the woods yet. You still must move.

Moving can be a challenge, which is why you’ll want to find a reputable mover you can trust. Here are five questions you should ask when going through the process of choosing movers:

  1. How much will it cost?
    Movers generally charge an hourly rate for short-distance moves or a rate based on weight for long-distance moves. Make sure they are willing to provide you with an estimate in writing.
  2. Are there additional fees?
    Some movers charge additional fees that they leave out of the estimate. For example, they may charge extra to move heavyweight items (such as pianos or safes) or to move anything up or down stairs. They should be transparent about such fees.
  3. How much experience do they have?
    Look for a mover that’s been around a while. Movers with a lot of experience are likely reputable since dishonest movers are usually discovered pretty quickly.
  4. Do they offer insurance?
    A good mover will provide basic insurance and will offer additional insurance options so you can protect your belongings.
  5. Can they provide referrals?
    Be wary of movers that can’t offer referrals. It means they can’t name a single customer that was happy with their services.

Don’t quickly hire the first mover you find. Keep in mind not all movers are equal. When choosing movers, be sure to ask these questions.

Contact us at Randy Lindsay for additional advice for first-time homebuyers, especially if you need help finding your dream home.

Selling Your Home: 5 Living Room Staging Tips

selling your homeIf you plan on selling your home quickly, then it’s vital you present your home in the best possible light. When buyers tour your house, you’ll want to make sure you leave a good impression.

One of the most important parts of your home that you’ll want to stage is the living room. Here are five living room staging tips to keep in mind:

  1. Clean
    Do a thorough cleaning of the living room. In fact, hire a professional cleaner. Although a bit of dust shouldn’t dissuade anyone from buying your home, it does leave a poor impression.
  2. Declutter
    Clutter not only makes your home feel dirty and disorganized, it also makes it seem like there’s a lack of storage space. Clear your shelves and coffee tables of magazines, mail, and other items that can be considered clutter.
  3. Depersonalize
    Buyers don’t want to feel like they’re walking through the home of a stranger. They want to be able to imagine themselves living there. Remove all personal items, such as the family photographs you have hanging on the wall or adorning your fireplace mantle.
  4. Furnish
    If you’ve already moved out, then you need to furnish your home. An empty living room won’t be very inviting. It will also make the space feel smaller than it is. Furniture can help buyers see how they can take advantage of the living room’s space.
  5. Light
    Proper lighting is needed to showcase your living room’s every detail. Poor lighting will make it feel smaller and dirtier. Buyers won’t want to spend time in a living room that’s dark and uninviting. Check to make sure all lightbulbs work and add light fixtures if needed.

Use these living room staging tips and contact us at Randy Lindsay if you plan on selling your home and would like to speak with a professional real estate agent.

Can My LLC Buy a Home?

buy a home

An LLC (limited liability company) is a business structure that is typically used to help keep your personal finances and assets separate from your business. It means that if your business falls into debt or is sued, your personal finances and assets will be protected — and vice versa. If you have an LLC, then you might be wondering if you can use it to buy a home. The answer is yes; however, whether you should or not is a different matter.

The Benefits of Using an LLC to Buy a Home

  • Improve LLC’s financial status – If you’re trying to grow your business, using your LLC to purchase a house will put the asset under its name, thereby growing its financial profile (and potentially making it easier to secure business loans and credit).
  • Ensure your privacy – The purchase of property is typically public record; however, if you use an LLC, you can keep your name out of that public record.
  • Limited liability – If someone is injured on your property, they’ll often only be able to sue your LLC and not you personally.

The Drawbacks of Using an LLC to Buy a Home

  • Securing financing is more difficult – Trying to secure certain types of loans to buy the home can be difficult if you’re trying to do so under an LLC.
  • You may not qualify for capital gains exclusions – If you sell your house and make a profit, you’ll have to pay capital gains taxes. If you’ve bought the house using an LLC, you won’t be able to qualify for the capital gains exclusion, which means you’ll have to pay significantly more in taxes.

Keep these pros and cons in mind if you’re thinking about using an LLC to buy a home. For more home buying advice, contact us at Randy Lindsay today.

MY BIO

Randy has enjoyed over 31 wonderful years in the Real Estate industry making dreams come true for homeowners.

Superior customer service is #1 to Randy and he provides this to all of his clients using knowledge, professionalism, integrity and persistence.

Randy is a successful and experienced real estate agent who expertly represents both buyers and sellers. Scores of Charlotte area residents have trusted Randy in the process of listing their homes to sell.

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