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Understanding the Earnest Money Deposit

What it is and why it’s good to include it as part of your real estate transaction.

Earnest money is specifically used to show that a buyer is serious about purchasing a property in regards to real estate transactions. Earnest money is paid by the buyer to the seller and shows a level of commitment and integrity towards the purchase and it is used as a down payment if and when the buyer goes through with the offer. If the buyer does not go through with the offer, then the earnest money is left to the owner and not returned to the buyer. Earnest money is vital to how real estate actions are perceived by buyers as well as sellers because they demand a certain level of seriousness in regards to purchasing the property to the seller. Many buyers can be interested in a property, but unless earnest money is exchanged by the buyer to the seller, a serious transaction cannot take place. Earnest money wins the appreciation from the seller to the buyer and instills that the property is practically in the buyers hands and earnest money gives the buyer first priority on a property sale. The reality is still that unless the property has been fully sold, it is still the property of the owner, but earnest money can give a buyer the reality that the property is close to being theirs. Earnest money is a great tool used in real estate transactions and can convince a seller to go with one buyer over another. If a buyer utilizes the earnest money tool, then they are giving top priority for the property, even if all the paperwork has yet to be signed. Earnest money is similar to a promise from the buyer that they will be purchasing the property. It is a good idea for sellers to instill earnest money into their real estate transactions because then they have much less of a threat of getting short-changed by a buyer who says one thing and then does the opposite. Earnest money gives a verbal promise a level of backing that works to benefit the entire real estate transaction. READ MORE

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Maine Home Buyer Tax Credits

These days, there are amazing tax credits for a lot concerning the real estate industry. Namely, the first-time home buyer tax credit as an exceptional tax credit for first-time home buyers. The first-time home buyer tax credit for 2012 includes getting 20% of the interest that you pay back every year for the next 30 years. The 2012 home buyer tax credit is actually better than the home buyer tax credit that has been offered in previous years. And, it is important to have the knowledge of any tax credits because this will weigh in on how much buyers are willing to spend on a home taking the tax credit into consideration. There are many benefits for the tax credits offered and they include reducing the liability of federal income tax for the homebuyer, giving the homebuyer more money to use on the purchase of a home. The other benefits include giving a Maine homebuyer access to more money each month, thus lessening debt and other issues that may arise from a larger purchase, and the tax credit can be utilized with any type of mortgage that also includes adjustable rate mortgages. But, this tax credit cannot be used with tax-exempt bond programs. The tax credit can be claimed for as long as the buyer lives in their home, given that they pay interest on the mortgage loan and that they purchased it as their primary residence. There are certain qualifications and specifications that must be met in order for homebuyers to receive this great tax credit. Certain regulations include buying a home within a certain specified area of Maine, be an eligible borrower as showcased by the MCC program fact sheet, not be using the home as a business or a place for trade, the buyer must purchase the home as their primary residence, the price of the home purchase must not exceed certain limits, as well as many more. All in all, this specific tax credit will save a first-time homebuyer a wealth of money over the years and is very beneficial for all parties involved. READ MORE