Earnest money is a monetary deposit made by the buyer to the seller showing the buyer’s good faith in a real estate transaction. It shows the seller that you are a committed buyer, so sellers rarely accept offers without this deposit. Earnest money amounts can generally vary from 1 – 5% of the home purchase price. But if the sales contract failed, how would the buyer get their earnest money back?
First, the buyer agrees, (by signing the sales contract) that any expenses for services requested by the buyer will be withheld from the earnest money and paid to the applicable service provider (for example, survey, building inspection appraisal, etc.). Second, the buyer and seller must sign a written “release of earnest money agreement” before any remaining funds are returned to the buyer.
If there is a dispute in the return of earnest money, a civil action must be filed by the buyer to determine its disposition. In such an event, court costs and legal fees will be paid out of the earnest money. As experts in investment title and closing services, with a team of knowledgeable, dedicated closers and processors, First United Title Agency, LLC can help navigate all contractual requirements that buyers face.
Founded in 2006, the team at First United Title Agency brings more than 100 years of combined experience in Paola Title Insurance andKansas City Title Insurance, Baldwin Title Insurance, mortgage documentation and closing techniques.