Earnest Money

Earnest money is a deposit the buyer pays when they sign the contract to show they're serious about purchasing your property. If the sale goes through, this money typically goes toward their down payment and other costs.

WHO HOLDS ONTO THE EARNEST MONEY? It usually goes to an escrow agent - an impartial third party such as a title company - who holds it until the transaction closes.

WHO GETS THE EARNEST MONEY IF THE TRANSACTION DOESN’T CLOSE? If the transaction doesn’t close, the terms of the contract determine who receives the earnest money. For instance, the earnest money is typically returned to the buyers if the buyers exercise their right to terminate during the option period.

 

 

Earnest money is a deposit a buyer makes to show they're serious about purchasing your property; if the deal closes, it goes toward their down payment, but if the sale doesn't go through, who gets it back depends on your contract—typically, the buyer receives it back if they back out during the contingency period.