What Happens To The Earnest Money?

In Ohio as part of the purchase offer you'll include earnest money.  Basically think of it as good faith money to the seller that you're not just wasting their time and if you walk away from the contract without following the allowed terms of the contract, it's the seller's to keep for their troubles and lost marketing time.

The amount you provide isn't defined unless it's a relocation company owned home, but a lower price home will be $500 to $1000, and that amount climbs a bit more as the price of the home grows.  If the seller doesn't like the amount you're offering, they may very well counter the amount.

But once we're agreed on all terms and the offer becomes an official contract, we've got to get the money deposited.  In most cases the brokerage repping the buyer will hold the money.  The money goes into a non-interest bearing trust account and is held until either the home is sold (and you're credited the amount at closing) or the purchase doesn't work out.

If the purchase doesn't work out due to reasons allowed within the contract (inspection issues, appraisal issues, HOA rules, etc.), then a release form is signed by the buyer side and forwarded to the seller.  That's what officially kills the deal and part of the form is designated where the earnest money goes.  As long as we stayed within the terms of the contract, the earnest money is returned to the buyer.

However if the buyer just breaks the contract because they got cold feet (or found a BETTER house), then most likely the buyer will be expected to forfeit the earnest money to the seller. If it gets more complicated than that, well it might be time to bring in a real estate attorney.  The brokerage holding the earnest money CANNOT release the funds until both sides have reached an understanding on who gets what.

Ready to talk the specifics of buying or selling a Warren County area home? Call The Liz Spear Team of RE/MAX Elite at 513-520-5305 or email Liz@LizSpear.com.

Serving Warren County Ohio area home buyers and sellers,

Bill of Liz and Bill aka BLiz