Earnest money represents a good faith deposit by a homebuyer to sign a purchase agreement letter. An earnest money deposit shows a buyer's level of seriousness in purchasing the home from the seller.

Earnest money deposits are relatively common in competitive markets, especially when a seller has concerns that a buyer may make multiple offerꦏs on other properties.

The real estate agent places the eꦏarnest money in an escrow account and cannot release it until both parties provide written pe♌rmission.

However, the 澳洲幸运5开奖号码历史查询:real estate agent or broker may return🃏 the earnest money, depending on the circumstances, such as if the home sale falls through because of a fail💦ed home inspection or a low appraisal.

Earnest Money Deposits

Earnest money represents a deposit made by a homebuyer indicating the intent to 澳洲幸运5开奖号码历史查询:purchase the property from the seller. If the sale goes through, the earnest money gets applied to the purchase price, down payment, or 澳洲幸运5开奖号码历史查询:closing costs.

How Much Are Earnest Money Deposits

The rules that govern earnest money deposits in 澳洲幸运5开奖号码历史查询:real estate transactions vary from state to state, but an earnest money deposit can range from 1% to 10% of the home's 澳洲幸运5开奖号码历史查询:purchase price.

For example, if you buy a $400,000 home, you may pay $4,000 to $40,000 as an earnest money deposit to show the seller you intend to buy the property.

Paying Earnest Money

Although uncommon, you may buy a home without putting down earnest money, but t🅷he seller must waive the earnest money deposit.

Potential homebuyers are discouraged from giving earnest money in cash directly to a seller for multiple reasons, such as it may prove challenging to get your money back if the dea🌠l falls through.

Instead, the 澳洲幸运5开奖号码历史查询:real estate agent or broker acts as an 澳洲幸运5开奖号码历史查询:escrow agent in accepting the 澳洲幸运5开奖号码历史查询:earnest money deposit on the seller's behalf and placing the funds in an 澳洲幸运5开奖号码历史查询:escrow account.

The Release of Earnest Money

Although few universal rules exist for handling earnest money, the rules should be outlined in the home's sales and purchase agreement. The agreement covers how to han🍃dle refunds and the parameters that determine whether the money gets returned.

The broker should seek a written release from both parties before releasing the earnest money deposit. If both parties claim the deposit, the broker should not release the funds until the two sides have come to terms or until a court order decides who gets the funds.

When Earnest Money Gets Returned to the Buyer

• The home appraisal value comes in lower than the purchase price agreed by the buyer, and the two parties cannot agree on a new price
• A failed home inspection, whereby significant issues arise, and the seller refuses to lower the price or make repairs
• If the buyer cannot sell their existing home
• If the buyer cannot secure a mortgage loan or financing to buy the property

When Earnest Money Gets Forfeited

• The buyer backs out of the purchase because they found another property
• The buyer agreed that the earnest money deposit was nonrefundable
• The buyer breaks a contractual agreement or deadline without a valid explanation
  

The Bottom Line

Earnest money represents a deposit made by a homebuyer to show the seller they're serious about buying the home. Earnest money deposits are not mandatory but are fairly common in competitive markets.

The 澳洲幸运5开奖号码历史查询:real estate agent or broker who accepts the 澳洲幸运5开奖号码历史查询:earnest money deposit on the seller's behalf places the money in an escrow account. If the purchase goes through, the earnest money typically gets applied to the closing costs or purchase price.