Deb Tebbs Group

Cascade Sotheby's International Realty

Category: Real Estate Tips

Earnest Money Vs. Deposit – What’s The Difference?


Is there a difference between earnest money and the deposit? The answer to this question is yes.

In this article we will break down the difference between the two so you will be fully prepared to purchase your next home in Bend or elsewhere in Central Oregon.

What is an earnest money deposit?

Earnest money—also known as an escrow deposit—is a dollar amount buyers put into an escrow account after a seller accepts their offer.

Another way to think of earnest money is as a “good-faith” deposit that will compensate the seller if the buyer breaches the contract and fails to close.

Earnest money deposits usually range from 1% to 2% of the purchase price of a home—depending on your state and the current real estate market—but can go as high as 10%. If a home costs $300,000, a 1% earnest money deposit would be $3,000.

The buyer’s financing can also dictate the amount of an earnest money deposit. For example, if a buyer makes a cash offer, the seller may request more earnest money to show a true “buy-in” from the purchaser, says Matthews. In that instance, the seller of a $300,000 home might want a 3% deposit (or $9,000) versus the 1% deposit for an offer financed through a mortgage.

In any case, the seller can either accept, reject, or counter the buyer’s suggested earnest money deposit amount, says Realtor® Bruce Ailion, of Re/Max in Atlanta.

Earnest money deposits are delivered when the sales contract or purchase agreement is first signed. They are often in the form of the buyer’s personal check. The check is held by the buyer’s agent (never given directly to the seller) and is sometimes never even cashed, says Brian Davis, co-founder of If the check is cashed, the funds are held in an escrow deposit account. The money will be shown as a credit to the buyer at closing and will offset part of the down payment amount or closing costs.

So here’s the real crux of the matter: If a prospective buyer backs out of the deal, the seller might be able to keep the earnest money deposit.

Matthews advises sellers to comb through the contract to see if they can take legal action. But keep in mind that if the buyers back out for any reason allowed by the contract or purchase agreement, they are legally entitled to get their earnest money back.

What is a down payment?

A down payment is an amount of money a home buyer pays directly to a seller. Despite a common misconception, the down payment is not paid to a lender. The rest of the home’s purchase price comes from your mortgage.

The down payment money can come from the seller’s personal savings, the profit from the sale of a previous home, or a gift from a family member or benefactor.

Down payments are usually made in the form of a cashier’s check and are brought to the closing of a home sale.

Typical down payment amount

The exact amount of a down payment is often determined by the lender in relation to the overall loan amount. The minimum down payment required by mortgage lenders is 3% of the house’s price, and a 20% down payment is recommended by the real estate industry. But that’s not to say you have to put down 20%. After all, that’s a large chunk of change to have on hand, especially for first-time home buyers.

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To get started with searching for a home in Bend Oregon contact us today by calling (541) 323-4823 or click here to connect with us online. 




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Should I Use A Bend Oregon Realtor When Buying Or Selling A Home?


Learn More About Why Hiring A Bend Oregon Realtor Is Important!

Bend, Ore. – One of the top questions that many people have had when thinking about buying or selling a home over the years is if they should choose a Bend Oregon Realtor® to help them with their real estate transaction and the answer to this question is always yes.

Hiring a Bend Oregon realtor is important because, not only will your Realtor® have the experience that you need help you with your real estate transaction in Bend, or the surrounding area, your agent will have the experience that you need in other important areas including:


Regardless if you’re buying or selling a home, your Bend Oregon Realtor® will have negotiation experience so that you’re best interests are represented during the entire real estate transaction.

Negotiation is one the most important things that happens during the real estate process, and every buyer or seller at some point can expect that they will have to negotiate in order to get the best price when either buying or selling a home in bend. This is why hiring a Real Estate agent makes sense because it guarantees that you not pay more money for a home than it’s worth or sell your home for less than its current market value.

Choosing the Best Offer

Another important area that your Bend Oregon Realtor® can help you in is choosing the best offer because, if you’re buying a home, you want your offer to stand out from other buyers in the real estate market, and if you are selling a home, you want to choose the best offer on your house so that you can so your home for the most money possible.

Making Sure the Transaction Goes Smoothly

Last of all, but most important, another reason to cheese in Bend Oregon Realtor® is to make sure that the entire real estate transaction goes smoothly from start to finish. Your agent will build help you with a wide variety of tasks that come with buying or selling a home in Bend which include understanding paperwork, filling out the real estate contract, having a home inspected and so much more.

Hire a Bend Oregon Realtor Today

To get started with hiring a Bend Oregon Realtor® contact the Deb Tebbs Group today by calling us at (541) 323-4823 or click here to connect with us online.

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5 Step Process for Buying a Home in Bend

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Buying a home in Bend is an exciting part of life since it means you will finally be moving from being a renter to a home owner.

Although the local Real Estate market is competitive right now you can give yourself the edge in the home buying process by following these simple tips.

    Tip 1 – Get Pre-Approved For a Mortgage Loan

Getting pre-approved for a mortgage is important since it will tell you the exact mortgage loan amount you qualify for and the funds you have to work with when buying a home.

Tip 2 – Determine Your Preferences

Think about where you want to live in Bend and determine what you are searching for in a home including your “must have’s” and “should have’s” in a home.

You should also determine the amenities you are searching for in a home or community as well.

>>>>>>>>> Search for homes in Bend – Click here! <<<<<<<<<<<<

Tip 3 – Choose a Real Estate Agent

Interview at least 5 Bend Oregon Realtor’s so you find the right Realtor ® who you feel comfortable working with.

Tip 4 – Preview Homes for Sale

Your agent may start with an area tour then show you specific homes in Bend which match what you are searching for.

During the home search it’s important to keep an open mind, especially since you may come across homes which have great potential, and after a little renovation could have everything you could want in a home.

Tip 5 – Make an Offer on a Home

Once you find a home in Bend you are interested in buying you will then make an offer on that home.

Before submitting an offer though your Realtor will provide you with a comparable analysis of homes for sale in Bend so you can submit a competitive offer on the home.

Don’t be deterred if you are going up against multiple bidders, take the time to write a letter to the homeowner which talks about your family and how much you love the home.

Adding that personalized touch may help the homeowner to choose your offer versus a competitors offer.


For more tips on buying a home in Bend, or to view the latest Bend Oregon Homes for Sale, contact the Deb Tebbs Group today by calling us at (541) 323-4823 or click here to contact us through our website.

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