Earnest money shows you’re serious
Typically when an offer to purchase a house is made, you, as the buyer, will also pay an “earnest money” deposit. This deposit shows the seller that you’re serious about the offer to purchase the property. Sometimes the amount matters to the seller, particularly if you are competing.
The amount of the earnest money deposit varies based on the type of property being purchased and local market conditions. As your real estate professional, I’ll help you determine the appropriate amount to pay as an earnest money deposit.
The sales contract will dictate who holds the earnest money. Usually the buyer’s real estate agent will deposit the earnest money in a trust or escrow account until closing. By law it must be deposited within a few business days. At closing, the earnest money is applied to the purchase price.
In the event the sale doesn’t close, the sales agreement generally spells out the conditions under which you would forfeit the earnest money. Generally if the buyer meets all the terms of the contract, the contract requires that the earnest money be returned to the buyer. As your Realtor, I will keep you constantly informed about deadlines and obligations so "losing your earnest money to the seller" can be avoided.