When Is Earnest Money Check Cashed

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Real Estate Broker/Owner with Real Living/Home Realty 24642

                                                              When Is Earnest Money Check Cashed

 

 

 Owensboro Real Estate

 

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.

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Kentucky Daviess County Owensboro
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Rainmaker
206,307
League City, TX - Worrell Team, REALTORS, GRI, CNE
RE/MAX 1st Class - League City, TX

Connie Lou, Excellent point!  The consideration is the sales price in exchange for the home.  And consideration for an option/termination period is an option/termination fee.  But, many times agents will ask for a 10 day option/termination period for $zero dollars$ -- and you can't do that!  Cheers!

Brian

Sep 16, 2011 05:20 PM #1
Anonymous
Fred
Brian, You absolutely can do that if it's part of the contract. You could stipulate that you wanted no cost options to withdraw from a contact until the day of closing. Of course, no one would agree to it, but it's really, as Connie Lou states very well, whatever the two parties agree to In the contract. There are practices that are based on tradition, but not rooted in law. Some periods make it so either party can press for more desirable terms, and today it seems to favor the buyer slightly more than the seller. Best, Fred
Apr 11, 2012 07:49 PM #2
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Rainmaker
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Connie Lou Barnett

GRI,CRS,CRB,SRMM,ARA,PRS,SFR,QSC
Get the Service you deserve! Call Connie Lou Barnett today.
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