Are You Concerned About Your Earnest Money Deposit?
By Pierre Mouchette | Bits-n-Pieces
The last thing any Homebuyer wants is to put an earnest money deposit down and then lose it! Unfortunately, it does happen, and yes, there are ways to protect your deposit. Understanding how your deposit is handled is the first step you can take in securing your deposit at the time of offer.
What is Earnest Money?
This is a deposit made by Buyers to show interest and intent to purchase real property. The buyer should make the deposit payable to a reputable third party such as a real estate brokerage company, legal firm, escrow company, or title company and obtain a receipt. The receipt must state that if the offer is not accepted, the earnest money deposit must be immediately returned (to the would-be buyer). Never endorse the earnest money to the Seller.
Caution: it is inadvisable to authorize a release of your earnest money deposit or pass-through until your transaction closes.
How Much is Required for an Earnest Deposit?
Since there is no set amount, it varies from market to market and across the country. The amount deposited should be enough to