Earnest Money Deposit (or EMD) means you are putting some money forward when you write a The check is presented with the offer but is not cashed (generally) until an offer is accepted and fully executed (both buyers and sellers have signed agreements.) I have to sign that the check is in my possession on the board offer so I cannot submit the offer without your EMD check or I could be subject to a fine by the real estate division. There are alternatives that I can sign on to submit an offer but your offer does not appear to be strong to the seller if you are making no effort to write out a check and place it in the possession of your agent. (Note: This rule may not apply in locations outside of my market area.) What if I back out of the sale – will I get my Earnest Money Deposit refunded? It depends. If you are within your due diligence time frame and you are backing out due to a contingency that you could not fulfill, you should receive an EMD refund. You should always check with a lawyer BEFORE you sign a contract and when you are backing out of a contract for an unsatisfied contingency. Typically in Las Vegas real estate, earnest money is applied to the purchase price. You are not “losing” that money when you close. It will be applied to your down payment or closing costs and if the EMD amount exceeds your down payment or closing costs, the excess will be refunded after close of escrow.
contract to purchase a home. When a home is listed in the Las Vegas MLS, the amount the seller is requesting is on the listing sheet. Everything in real estate is negotiable but you want to try to get as close to the seller’s number – when you are writing an offer on a Las Vegas Home – as possible.
The Regan Team Home Loan Group - Petaluma, CA
Thanks for the post Renee, any chance you can elaborate on increased deposits too? A lot of buyers ask me questions about when they should or why they need to increase their deposits.
Dec 30, 2010 02:53 AM
Equity Resources - Cary, NC
Advantage Lending 919-649-5058
Renee - I think it's critical for mortgage lenders to understand the new contract... and the implications!
Dec 30, 2010 03:50 AM
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer
Patricia: I tossed it around but decided to write against deposit strategy. It all depends on the scenario and I guess I would prefer to hash it out with the individual client with the scenario we are involved with.
Eleanor: True.
Dec 30, 2010 03:57 AM
Swanepoel T3 Group - Saint Charles, IL
I help brokers build businesses they love.
Renee: another good one. Regarding the increase of earnest money, it seems to be a local practice issue. Here it is typical in the City of Chicago but not in the suburbs unless it is a short sale. Sometimes transferees expect it to be tiered because it's practice in their area and so want to offer that way. Confusing if the seller and his agent don't understand.
I'm putting together a handful of things for you in the office today.
Dec 30, 2010 04:03 AM
3B Realty: 951-347-3818, CA - Murrieta, CA
Broker, Realtor, Representing Buyers and Sellers
Excellent post, Renee. Very informative... so I reblogged it! (But you already knew that.) ;) Thanks!
Dec 30, 2010 05:33 AM
ACTIONAGENTS.NET - Eugene, OR
Eugene Oregon's Best Home Search Website
Earnest money is such a familiar concept to us, we have to make a point of remembering that clients do not have that same familiarity...or comfort-ability ...with the ideas involved. That's true for both buyers and sellers.
Interesting that the expected earnest money is known up front in Vegas. Here it is sometimes a point in a counter offer but most agents just give some unofficial rule-of-thumb advice as to the proper amount... depending on purchase price...and that usually flies without issue.
Earnest money here is almost always taken in the form of a promissory note payable one or two business days after mutual acceptance. None of us want to handle earnest money ...and have to comply with state trust account rules. It's paid directly to escrow as a provision of the purchase agreement. I never take - nor expect - an actual check.
Earnest money is important. But there is clearly no enforceable deal until the inspection/repair negotiation period is over...usually ten business days after mutual acceptance here. So whether it's in hand one or two days in is simply not important to the seller's interest.
Our multiple allows three days to place the listing in pending status. I expect to see notice that the earnest money is in escrow before taking that action.
Dec 30, 2010 05:53 AM
ACTIONAGENTS.NET - Eugene, OR
Eugene Oregon's Best Home Search Website
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer
Leslie: Tiered EMD sounds intriguing to me! Thanks for doing all that too, I appreciate it!
Bill: Thanks for the reblog!
Jim: We just need to be in possession of the check which I am not very fond of. It is expected to be deposited within 24-48 business hours after accepted contract. It's interesting to see how it is different around the country! Thanks for weighing in!
Dec 30, 2010 07:30 AM
Coldwell Banker - Oconomowoc, WI
Waukesha County Realtor Real Estate agent. SOLD!
You are one smart lady Renee Burrows.
This post really makes sense and in a world where we think everyone makes an assumption you spell out exactly what is being talked about in a language that anyone can understand and more importantly use. Hats off to you!
Dec 30, 2010 11:00 AM
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519
I wish I'd have kept the hand written IOU that someone tried to give me for an EMD in the past. I truly don't know what people are thinking!
Dec 30, 2010 01:26 PM
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer
RETIRED / State License is Inactive - Portland, OR
Red Rock Real Estate ~ Southern Utah's Largest Independent Brokerage - Saint George, UT
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Savvy Home Pix - Allegan, MI
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