Keeping Your Earnest Money Safe

When you make an offer on a house, you also write an earnest money check, which is usually submitted to the listing agent and held in escrow until all negotiations are complete. Earnest money is intended to demonstrate your good intentions toward purchasing the property. What happens to these funds? Read on, and make an informed decision:

The party holding the check acts as an escrow agent until the date of closing. At that time you will receive credit for the amount of your check against the down payment and closing costs. Real estate brokers are required by law to keep escrow funds in a special account. These funds cannot be used to pay any other expenses associated with the sale. If you don't complete the transaction, the purchase contract determines the disposition of your earnest money.

If you default on your agreement, the funds may go to the sellers, so ensure that you fully understand the deadlines in order to avoid breach of contract and forfeiture of your deposit. Review this part of your contract closely to acquaint yourself with the how’s and why’s of the obligations to which you are committing before you sign on the dotted line. If you have any questions, be sure to ask your real estate agent for advice.

If you have questions about moving, building, selecting your first home or moving up to your next home, contact DAVID BRENTON’S TEAM.

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