Once you have made the decision to purchase a home, and have chosen a suitable property, you might be expected to extend an earnest money deposit (EMD). This is money that demonstrates to the seller that you are serious in purchasing his or her house. It is essentially a deposit that shows your intent to act in good faith.

To clarify, the earnest money deposit is different than a down payment. In many cases, the EMD is actually part of the down payment. If you decide to back out of the purchase transaction once escrow has begun, the seller has the legal right to keep it (though laws vary by state).

In this article, we'll provide the details behind making a good faith deposit. You'll also learn how conflict can arise regarding its refund in the event the purchase transaction is canceled.

Size Of Your Earnest Money Deposit

Size varies by market conditions. Some experts suggest that a homebuyer should be willing to offer 3 percent of the amount stipulated in the purchase agreement. Others argue 3 percent is excessive; according to them, the EMD should be no more than 2 percent of the purchase price. Still others recommend extending a specific dollar figure (e.g. ,000) rather than a percentage.

Confusing the matter further, a seller's market is likely to attract larger earnest money deposits than a buyer's market. This is understandable since competition among buyers increases in a seller's market.

The amount you offer the seller will ultimately be dictated by state laws and market forces. If there are few buyers, and a particular seller is motivated to sell, a 0 EMD may be sufficient.

Who Receives The Deposit?

Payment can be handled in different ways. Ideally, the deposit should be given to a third party, such as a law firm or real estate brokerage. It should not be given to your real estate agent, or to the seller.

Place the EMD into an escrow account with a contract that details the circumstances under which the deposit will be released to the seller or returned to the buyer. If the purchase transaction is canceled during escrow, the contract will determine who has the right to keep the deposit.

What If Conflict Arises Regarding The Deposit's Return?

There are countless situations in which the transaction falls through, and both buyer and seller believe they should receive the earnest money deposit. Usually, both parties are required to sign a mutual document stating what is to happen with the good faith money. In cases where both parties feel differently, the company holding the EMD will continue to do so. The money will be released when the third party receives an agreement signed by the buyer and seller, or the state's statute of limitations is reached.

As mentioned, each state has different laws governing treatment of the EMD. For example, California requires that action is taken with three years. New York forces an action with two years.

An Example Showing Potential Conflict

Suppose after looking at homes for sale, you have chosen to purchase a particularly attractive property. You extend an offer to the seller, which she accepts. To demonstrate your intent to buy, you offer a ,500 earnest money deposit, which is placed into an escrow account. However, during escrow, you forget to file the proper documentation with your loan application, and financing falls thorough. Consequently, you cancel the purchase. The seller believes the EMD is hers to keep. You believe the deposit should be returned to you. Thus, a conflict arises.

Normally, the contract filed with the good faith money should determine who has the right to keep it. If you and the seller disagree, however, the case can ultimately end up in court.

An earnest money deposit is a valuable way to demonstrate to a seller your intent to purchase his or her home. But realize it does not guarantee a smooth transaction. For that, many other factors must fall into place.

In the past, aspiring music producers used to have to know people in the music industry, make a few mix tapes, save a few thousand dollars, and take a trip to the local studio to get any of their own beats recorded. This represented an enormous obstacle for those trying to get involved with making rap beats, and kept many beginners from getting their start. Even sooner than this, beginners would be required to buy expensive desktop rap beat making software that was impossible to understand and learn. Now, there are online rap beat makers that make it easier than ever to start making rap beats online. What should you look for in an online rap beat maker? The thing that seperates online rap beat makers from their desktop counterparts is ease of use. Desktop beat maker software is technically dense and has a lot of extraneous controls and features that most beginner producers will never use. Online rap beat makers cut out this "fluff" and give you only the features that you need (the good ones anyway). Be on the lookout for easy exporting to mp3 files (the sound format that you would burn onto a cd to show your friends your beats), a simply user interface, and a big preset sound library. The ability to export files to mp3 was important to me when I first started looking for an online rap beat maker. One program that I used in the past, which I won't name, made it very hard for me to save my rap beats as mp3s. See, it was very important for me to be able to do this because I burned a lot of mix CDs for car rides with my other beat making buddies.

We would 'show and tell' our beats so to speak. Before signing up for a rap beat making site, check to make sure they have mp3 exportability. I know sites like Sonic Producer have this included. Next, a simple user interface is key to finding a good online rap beat maker. The entire point of switching from desktop to online is about the user experience. You want to be able to make hip hop and rap beats, and it should NOT be a chore. A few clicks, drags, and taps and you should have a nice fat track layed out in front of you. If the online beat maker you are looking it does not seem easy to get started, then simply move on to the next one. As I said, also be sure to look for a nice big preset sound library. This goes hand in hand with the ease of use and the whole principle behind having an online rap beat maker in the first place. It is much easier to make your own hip hop beats and instrumentals if you have a lot of hits, drums, scratches, and loops to choose from. In the past, sites and programs would start you with nothing and expect beginners to know how to synthesize samples and loops. One website that has fit the bill perfectly for me is an online rap beat maker called Sonic Producer. I think you will find that not only is it one of the most affordable websites to become a member of, it is one of the easiest systems to start making rap beats online in no time at all. This site gets beginners started easier than any other system I have seen. Their customer support is unrivaled, and their online rap beat maker is top of the line. And yes, they have mp3 exportability. To learn more about this beat maker, check out Beat Makers Online.

Previously, up-and-coming hip hop beats producers would be required to know people in the industry, make a couple of mix tapes, save a few grand, and head off to the studio with their fingers crossed. This was an enormous obstacle for those trying to get their start making hip hop beats, and prevented many from ever making a single track. Not too long after this era, with the rise of computers, they would be required to get painfully overpriced hip hop beat making software that was hard to understand and impossible to learn. Now, online hip hop beat makers make it easier than ever for these people to get a foot in the door. So, what things should you look for in an online hip hop beat maker program? The ease of use of the system is what separates online beat makers from their desktop software friends. Desktop hip hop beat maker software is filled with controls and features that would never be used by beginners; the online hip hop beat makers cut out this unneeded fluff and started giving users only what they need to make sick hip hop tracks. Some common features to be on the lookout for: easily adjustable tempo, easy export to common files such as mp3, multiple tracks, and a preset instrument sound and beat library. Being able to export to mp3 was important to me when I first started looking for an online rap beat maker.

One program that I used in the past, which I won't name, made it very hard for me to save my rap beats as mp3s. See, it was very important for me to be able to do this because I tend to burn a lot of mix tape discs for long rides with my friends who also make hip hop beats. Before signing up for a hip hop beat making site, check to make sure they have mp3 exportability. I know sites like Sonic Producer have this included. Next, an uncluttered easy to use user interface is of utmost importance. The entire point of moving to making hip hop beats online is the ease of use of these sites. You must to be able to make beats with little effort: if you find yourself struggling you are probably using the wrong program. Don't confuse ease of use with poor quality however, programs like Sonic Producer are top of the line but cut down on the stuff that isn't needed. As I said, also be sure to look for a nice big preset sound library. This goes hand in hand with the ease of use and the whole principle behind having an online rap beat maker in the first place. It is much easier to make your own hip hop beats and instrumentals if you have a lot of hits, loops, drums, and instruments to choose from. In the past, sites and programs would start you with nothing and expect beginners to know how to synthesize samples and loops. One website that is perfect for beginners is an online rap beat maker called Sonic Producer. I believe you will find that not only is it one of the most affordable websites to become a member of, it is one of the easiest systems to start making rap beats online in no time at all. This site gets beginners started easier than any other system I have seen. Their customer service is unrivaled, and their online hip hop beat maker is top of the line. And yes, they have mp3 exportability. To learn more about this beat maker, check it out by following the previous link or any of the ones in the resource box below:

Make Beats Online | Any make beats online software the you choose should be simple and easy to use. The best way to find out if a program is easy to use is to check for reviews on a number of different forums. People will normally leave comments about their experience with the different types of beat making programs.

Download Free Trial Version

In some cases a software company will allow you to download a free trial version of their software program. This will give you a chance to see if their program can produce the quality of beats that you are looking for. This will also give you a chance to see how easy it is to work with their software program. Many of the best beat making software programs do not offer a trial version.

The Timing Feature

Any good program should give you the ability to adjust the timing in just one or two clicks. The average production software offers a grid that should be fully customizable to your ideas. You will need to be able to change the tempo, or make the pattern longer or shorter. Being able to quickly edit or change the timing of your production is very important. If a company is not offering this feature, move on to another company.

Putting It All Together

There are many parts of a music production that may have to be rearranged. You will need to string different patterns together to produce the high quality beats that you will need. You should be able to do this by using the creation grid of the software.

Sound Banks

Purchasing a software program that offers a good sound bank is a must. Different styles of music production will require certain sounds. You must purchase a program that offers many different drum samples with multiple types of sounds. There should be a full range for sounds for bass kicks, horns, pianos, guitars, and many other effects.

Saving Production

Any good product should offer you the ability to save your production into an mp3 or some other type of audio. You should be able to save your completed production to your hard drive. Also another important feature is the ability to open and edit programs that you have saved on your computer.

Free or Paid Software

Free software programs will allow you to get started immediately without putting out any cash. Generally speaking, free software programs will not offer some of the features that you will need to produce a quality music production. But it will give you a good idea on how create and learn some of the basic steps you will need to turn your music ideas into quality beats.

Low Cost Software

There is no point to invest a great deal of money to get started. You should pay around .00 for a good beat making program. Take some time to create a number of beats over around 7 to 14 days. Once you are more experienced with these types of programs. You may want to look into purchasing a more advance software program. At this point you would be in a better position to select the more costly programs because of your experience in using many of the basic features of these types of programs.