Posts By: Portia Gifford

What is a Title Company’s Role in Option Money and Earnest Money?

We get a lot of questions about the differences between Option Money and Earnest Money. So, we wanted to provide some insights and updates to help answer some of those questions. Many factors or events can impact the process from beginning to end (mainly depending on the contract). However, the important thing to remember is the title company is a facilitator and neutral party. We can’t intervene like an attorney, accountant, financial advisor or mediator. Everyone in the process is a client of the title company.

With that in mind, here’s what you need to know about Option and Ernest Money.

Option Money guidelines are determined by the parties in the contract, and it:

  • Costs around $100-200 in most cases
  • Allows the buyer time to make sure they are 100% ready to purchase (Do inspections, etc.) 
  • Allows a buyer to cancel the contract without restriction (within the agreed time frame)
  • Covers a time frame usually between 5-10 days (depending on the contract)

As of 2021, the buyer provides the title company with the funds. It is one of several recent changes to option fees and contracts. That money can be released to the seller at any time, and it’s non-refundable (even if the contract is canceled). However, cancelations have to take place in a timely manner.

Earnest Money is like a down payment on your investment because it is:

  • A deposit of “good faith” money between you and the real estate agent
  • Allows time for financing, title search, appraisal and inspection before closing
  • A credit towards your down payment and other costs if the deal closes
  • An amount that’s usually 1% of the sales price – a larger amount can help your offer stand out

Some things that could put your closing funds in jeopardy include, financing issues, appraisal challenges, or even personal reasons such as losing a job. If one, or more of these instances occur it is important to update your trusted agent so they’re aware of any problems and can help you come up with a solution.   

People often will call us and ask us to intervene, give our opinion or take sides. We can’t do that.

Here’s what we need if a contract is terminated:

  • The fully executed Termination
  • The fully executed Release of Earnest Money Form (signed buyer and seller)
  • The address to send funds. 

It’s important to note that we need the Release of Earnest Money Form even if the contract was terminated during the Option period. That way, there is no confusion on who receives the funds. 

Checklist for New Homeowners

If you’re a new homeowner with little experience managing your home, here is a checklist curated especially for you. At ZYYAH, we’re all about empowering homeowners so you can step out confidently on your own. When it comes to your home, we want you to be the expert. Keep reading to see if you’ve tackled everything on the list!

  1. Get an Inspection –  Be sure your agent contacts a trusted professional to complete your inspection or that whomever you choose completes a thorough inspection from the inside out.
  2. Ensure Home Safety – Sometimes swapping locks is not enough. Be sure to scout for a reliable home security system that covers all bases of the home and offers swift correspondence in the case of an emergency. Ask your agent or close friends and family about their experience with their providers and lean toward one with sound safety protocols.
  3. Plan Out Your Home Maintenance –  When it comes to maintaining your home – the HVAC, the pool, the fridge, and more – there’s a lot that goes into keeping your home running smoothly. Create a list of all of your appliances or try out our app, so that you have a bird’s-eye view of your assets and what needs close care.
  4. Update Your Address Across the Board – Update your address with the post office and spread the word to your loved ones that you’ve moved. Don’t forget to contact your retailers, creditors, or insurance providers and share with them as well!
  5. Secure Local Health Providers – Dentists, primary care providers, optometrists, oh my! There’s a lot to do when living in a new community. Be sure to ask around and do your due diligence on local providers who are unique to you and your family’s needs.
  6. Get to Know Your Local Contractors – If you know you’ll need a landscaper, repairman, or dogwalker, hop on the net or ask your neighbor if they have anyone they can recommend. Create a list of reliable contractors who you can call on anytime.

Our partners at ZYYAH, take all the information you input into the app to provide unique insights and recommendations for you to properly manage your home! Join our mailing list below to get first access to the app today and explore all the ways in which our tool utilizes your homeowner info to recommend home improvements, share maintenance tips, take inventory, and more!

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4 Ways Technology Has Impacted The Real Estate Industry

Technology shapes the way we live, so it only makes sense that it shapes how we buy and sell real estate. Existing and emerging technologies have been disrupting the real estate industry for years, from your late-night cruising of million-dollar listings to getting approved for a home loan while you binge the latest Netflix series. Technology is driving new and exciting ways for us all to engage with an industry that has historically been a mystery to many. Simply put, it’s easier than ever for home buyers and sellers to find what they need to buy or sell a property thanks to technology.

Here are four ways technology has impacted the real estate industry:

Online Listings & All That Comes With Them

Gone are the days of printed ads in newspapers and magazines. Websites, and apps that make viewing the inventory of an area and see what’s available easy. Couple that with the easily accessible and detailed property descriptions and photos, which can include everything from tax history to local school ratings, and many individuals already have a fair grasp of a property before they ever reach out to an agent, or step foot on the property.

Mobile Apps Accessibility

These days it feels like the world really could fit in the palm of our hands, thanks to mobile apps. Today’s apps are empowering people to own their real estate journey. From helping buyers filter through new properties to easy access to budgeting and other financial services and tools.

E-signing Services & Cloud Integration

Thanks to technology, real estate transactions no longer mean that real estate agents lose time chasing signatures. Our ability to send, share, and sign documents safely are being utilized in a number of ways within the real estate industry, from lending to closing. While COVID may have been what pushed the industry to move many in-person exchanges to remote, the ease and efficiency that technology has offered likely mean that, for many, its use is here to stay.

Automation & Consistency

Every job has a host of repetitive tasks that eat away at our days, and realtors, landlords, property managers, and other real estate professionals are no exception. From making it easier to fill out the same form for multiple properties by auto-filling information to automating marketing and messaging. Technologies are allowing real estate professionals to provide their clients, and potential clients, with consistent and informed service that goes above and beyond.

Technology offers buyers, sellers, and real estate pros convenience that is also cost-effective and secure. Allowing for more connection, service, and reach that benefits the real estate industry, and the communities that it serves, as a whole.

Our partners at ZYYAH, their mission is to make technology work for homeowners, real estate professionals, and home service professionals alike. Creating stronger communities and empowering homeowners to truly own their home management journey. Head to the app store and sign up for our free platform today, we can’t wait to help you home best!

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