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What is Earnest Money? How does it work here in King County?

By
Real Estate Broker/Owner with HOMEFRONT Realty WA State Licence #23384

What is Earnest Money? How does it work here in King County?

Earnest Money Deposit:  This is the deposit you make to show your good faith that you are committed to purchasing the home.  The deposit will not be refunded to you after offer acceptance unless one of the purchase and sales contract contingencies is not satisfied.  Your earnest money deposit is credited back to you at closing towards down payment or closing costs if the offer is accepted.

 

Every time I  write a Purchase and Sale Contract (Form 21) for my buyer clients I am obligated by the contract terms to collect the earnest money.  The Purchase and Sale Contract spells out in detail what happens to this earnest money.

Earnest Money. Buyer shall deliver the Earnest Money within 2 days after mutual acceptance of this Agreement to Selling Broker who will deposit any check to be held by Selling Firm, or deliver any Earnest Money to be held by Closing Agent, within 3 days of receipt or mutual acceptance, whichever occurs later.

 

There is no need to worry about your money, it will be placed in a trust account at either the selling brokerage or at the closing agent office, which is usually an escrow company.  When it comes time to close your transaction you will see a credit for your earnest money on your closing statement.  It really is still yours.

 

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Jo SossAuthor:Jo Soss

Jo Soss is the designated Broker and the owner of Homefront Realty in Bremerton Washington. Selling real estate in the greater Puget Sound area since 1994 she has vast knowledge in all aspects of a real estate transaction. Using today's technology with her signature personal service allows her to achieve complete customer satisfaction.

Comments(3)

Jennifer Fivelsdal
JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571 - Rhinebeck, NY
Mid Hudson Valley real estate connection

Jo giving an explanation of the different stages of the tranaction process is really appreciated by buyers.

Jan 25, 2012 11:32 AM
Jo Olson
HOMEFRONT Realty - Kettle Falls, WA
Retired - HOMEFRONT Realty @ LAKE Roosevelt

Jennifer, Thank you. I have decided this year to break down some terms in very simple explanations. 

Jan 25, 2012 12:06 PM
Donna Foerster
HomeSmart Realty Group - Parker, CO
Metro Denver Real Estate Assistant

Hello Jo~ I'm working on a series of posts, RE Q&A and I will be tackling What is Earnest Money also.  It's important for consumers to have a resource to tap in to to get answers to their questions.

May 21, 2012 05:29 AM