Earnest money is a deposit attached to an offer to purchase real estate. Providing an earnest money deposit shows the seller that your offer is genuine. Not all offers need to have earnest money. Real estate is a legal term that encompasses land along with anything permanently affixed to the land, such as buildings. ...
If the offer is accepted, the earnest money is kept by the seller and subtracted from the purchase price, or is kept in escrow until closing, when it is applied to the buyer's portion of the closing costs. If the offer is rejected, the earnest money is usually returned. If the buyer retracts the offer, the earnest money is usually forfeited.
Earnestmoney is a financial pledge from the buyer that he/she will make a diligent effort to fulfill the terms of the Contract to Purchase presented to the seller.
The earnestmoney is returned to the buyer as long as the failure to close was due to contingencies included in the Contract to Purchase not being met or removed due to no fault of the buyer.
By law, the earnestmoney given to the REALTOR® with the Contract to Purchase must be kept on deposit in a broker's non-interest bearing trust account until closing or until both parties agree in writing as to is disbursement.
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