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What Is An Earnest Money Deposit?
What Is An Earnest Money Deposit?
 
What is Earnest Money and why is it important to your real estate transaction?
 
 
My good buddy Randy Lynch told me the story about a client who wanted to know “Who this Ernest guy and why does he want my money?” Well, let’s dig in and find out!
 
The EARNEST MONEY DEPOSIT or EMD is a good faith gesture (in the form of money) that a buyer presents to a seller along with a purchase offer, to show that they are serious about completing the contract. It’s their financial “skin-in-the-game”.
 
Because your offer to purchase effectively takes the sellers home off the market, the seller needs to be convinced that you, the buyer, will uphold your commitment. They don’t want to negotiate for 30 days with their house off the market only to find out that you are not a serious buyer. They may have missed other offers or worse, missed the peak selling time!
 
So, after you deposit your money You may ask, “Is the Earnest money Deposit refundable?” It could be if certain terms and contingencies of the contract are not met. A typical purchase contract will have an appraisal contingency that states the offer is cancelled if ... more

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