When Is Earnest Money Check Cashed
We get a earnest money check (most of the time) when we write an offer to purchase. We negotiate the offer and when we have an accepted agreement we give the earnest money check to the listing agent to cash and hold in escrow until we go to closing. At that time the listing company will write a check from their escrow account and take it to closing as part of the buyer's down payment.
Although the sales price is stated in the contract to purchase real property, the actual consideration which supports the contract is the mutual exchange of promises by the buyer and the seller to legally obligate themselves to do something they were not legally required to do before the seller agrees to sell the property for a specific price, and the buyer agrees to pay that price for the property. No earnest money deposit is required in order to make a contract binding. Sellers, of course, may ask for an earnest money deposit to show a buyer's good faith, but it is not required for consideration.