Earnest Money for Your Anchorage Home
Each market has a different rule of thumb for earnest money. It’s not required for a valid contract, but the funds are required to be helded in a trust account, by the State of Alaska. Usually it will run between 1% and 3% of the purchase price. In the past some people put up their horse as collateral, but things have progressed over the years. Earnest money is merely a method of showing a Seller the Buyer has the legitimate intent to purchase.
The funds are usually written at the time a contract is presented and is taken into consideration when the contract closes. When you receive a Lenders good faith estimate, a required document, the earnest is estimated. The broker is required to keep the funds in a trust account, with complete records.
Wikipedia defines Earnest Money: An earnest payment (sometimes called earnest dollar, Earnest Haby or simply earnest, or alternatively a good-faith deposit) is a deposit towards the purchase of real estate or publicly tendered government contract made by a buyer or registered contractor to demonstrate that he/she is serious (earnest) about wanting to complete the purchase. When a buyer makes an offer to buy residential real estate, he/she generally signs a contract and pays a sum acceptable to the seller by way of earnest money. The amount varies enormously, depending upon local custom and the state of the local market at the time of contract negotiations.