Earnest Money Deposit

Earnest Money is a REFUNDABLE deposit as long as buyer terminates PRIOR to the Due Diligence Date. The Due Diligence Date is a date negotiated into the Contract by both parties. Once 5pm Due Diligence Date passes, this money is now non-refundable.

Initial Earnest Money is written to the Escrow Agent which is typically the Closing Attorney.

The point of this deposit is a way to prove to the Seller that the Buyer is still interested in purchasing the property. Due Diligence date has passed and the Seller is now scheduling movers, arranging plans for their next home, etc. This is to give the Buyers time to do inspections, get past underwriting, appraisal and any other items that may arise during the “research” time period known as Due Diligence.

Additional Earnest Money can be written into the contract on a determined date or it can be negotiated while already under contract. A great example of this would be if closing may have to get delayed and the buyer needs the seller to agree to delay things and wants to offer an additional deposit as good faith.

As always, feel free to call or text with any questions on this topic!