What is earnest money in a real estate transaction?
In the Columbus, GA area market earnest money is a deposit held by a real estate company, seller or builder when entering into a contract to purchase a home. The earnest money deposit is usually 1% of the purchase price. It is usually deposited into the trust account of the brokerage company or real estate agengy. A check in the same amount is brought to closing and can be used to go toward a buyers down payment or toward their closing costs in the transaction. In some cases if the loan is 100% and the seller is contributing the full amount of the closing costs the buyer may get all or a portion of the earnest money back.
Can I lose my earnest money for any reason? Why yes, great question! Actually you can lose your earnest money if you default on your end of the bargain. If you have a due diligence period during which time you have your inspections, You can terminate the contract for any reason and get your earnest money back. However, if after the due diligence period is over, you decide that you no longer want the property for whatever reason, you can lose your earnest money and it will go from the Trust Account to the Seller's personal bank account.
For more information on buying or selling a house please contact us!
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