The expression "putting your money where your mouth is" demonstrates a monetary sincerity to what could be empty words. In today’s competitive market where multiple offers are common, sellers want as much assurance as possible that the buyer is sincere and will close on the sale.

The seller who accepts a contract expects the buyer to follow through but, in most cases, doesn’t know the buyer either personally or by reputation. The earnest money submitted by the buyer with the contract shows their commitment to the terms of the offer.

If the amount is relatively small, the seller could be concerned that the buyer may walk away from the contract if they change their mind before closing. The lost time could be injurious to a seller who is trying to meet a deadline.

The more earnest money a buyer deposits indicates to the seller a higher level of commitment to the contract. Except for stated contingencies in the sales contract, if the buyer fails to close on the sale, the earnest money could be forfeited. Significant earnest money makes the seller feel more secure that the contract will indeed close.

There certainly are a lot of things that can dictate how much earnest money is appropriate. Local customs, price of the home and type of mortgage can all help to determine the proper amount. In some areas, it may be common for it to be one to five percent of the purchase price. In other areas, it might be a specific amount like $1,000 to $10,000 depending on the sales price. It really comes down to whatever the buyer and seller agree is the proper amount.

Another strategy is for the buyer to put up an adequate amount initially prior to inspections or other contingencies, and then, to put up an additional amount when the contingencies have been removed.

The earnest money demonstrates the buyers’ sincerity in making the offer and proceeding according to the agreement so the seller can take their home off the market and start making plans to move and give possession of their home. A higher-than-normal amount could also help the seller to choose yours in a multiple offer situation. Ultimately, both parties want to close as anticipated according to the contract and the earnest money helps facilitate that.

Your agent can explain what is customary for your area and price range. Many times, a disinterested party, like a title company, will hold the earnest money and the sales contract will provide how to dispose of it should the contract not close.

A current inventory of all the personal items in your home is important and even necessary, if you are faced with filing a police report or insurance claim. The homeowner is usually asked if they have a home inventory. If not, the homeowner can reconstruct one to estimate the loss.

Imagine you are in this position; would you be able to make an accurate list of your belongings and their value? As an exercise, pick a room of your home, and, while being in another room, list all the belongings and their value. When you’re finished with the list, go into the room, and check to see how you did.

This little project should demonstrate the difficulty of reconstructing a list and depending on whether you missed a lot of items and the importance of having an up-to-date home inventory. Not only will this help you purchase the right amount and type of insurance, having an accurate inventory will make filing a claim easier.

An accurate accounting of your belongings can also help you and your insurance agent to see that your belongings are properly insured. Other reasons for a home inventory include creating a maintenance calendar and helping you declutter by getting rid of items no longer needed. Over half of households do not have a home inventory and the majority of those who do have them, haven’t updated them with new possessions purchased since it was done.

The peace of mind having one can be a strong reason for having a home inventory. It provides confidence that this area is financially organized and prepared should you have need of proving losses. It will help you and your family return to your normal life after an unsettling event.

Download our Home Inventory for more tips on creating one along with alternatives for documenting your belongings. If you don’t have another media, this will allow you to take pictures and list individual items along with values in a fillable PDF that can be stored safely in your online cloud.