REGARDING: Earnest Money Deposit <EMD> [Questions and Answers]
What is EMD? EMD is the upfront stated monies that a buyer proposes to pay upon an accepted and fully executed purchase agreement to show good faith that the buyer has earnest and good intentions to fulfill the terms of the purchase agreement.
If I do fulfill the terms of my agreement, do I lose or keep my EMD? Your EMD will be credited to the purchase of the home/closing costs/loan down payment. This means that you do not lose it....you keep it.
In what form is the EMD? The EMD is usually in the form of a personal check or cashier's check. At the time of your offer submission the EMD is held in safe trust by my Real Estate Broker.
Where is my EMD held? Upon acceptance of a fully executed purchase agreement, the EMD is submitted to the Escrow Company. The Escrow Company is an unbiased, neutral, third party company that carries out the instructions of the purchase agreement.
When is my EMD cashed? EMD will only be cashed upon mutual acceptance and a fully executed purchase agreement by both the buyer and the seller. Only at this time the EMD is submitted to the Escrow Company for accounting and handling.
Can I ever lose my EMD? Only if you default on the terms of the Purchase Agreement. A default is when a purchase agreement is cancelled outside of the agreed upon contingencies. Please note that if you cancel the purchase agreement within the contingencies and terms of the Purchase Agreement, then your EMD will be refunded back to you.
How much should my EMD be for? It depends. Customarily no less than 1% of the purchase price....but you may place more EMD to poise yourself with a strong offer to help ensure that you get the home.
Please note that these are my answers as they apply to customary Real Estate in Las Vegas, NV.
Should you have any questions, please feel free to contact me. :)