But are you in any danger of losing that money?
You could be, so here’s what you need to know.
What is an Earnest Money Deposit?
An earnest money deposit is cash that you give a seller to let him or her know you’re serious about buying the home. The money is typically credited toward the purchase price of the home when you close.
You don’t give the money directly to the seller. You give your Realtor® a cashier’s check or another form of approved currency, and your agent holds the money in escrow for you.
Remember, earnest money isn’t your down payment. Your down payment goes to the lender. This is a “good faith” lump sum that shows the seller you’re really going to buy the home, so it’s safe to take it off the market.
How Could You Lose Your Earnest Money Deposit?
If you and the seller can’t come to an agreement after you make an earnest money deposit, you’ll likely be entitled to get your money back. However, there are a few instances that can cause you to lose your earnest money deposit. Your Realtor can talk to you about each of them in detail, but they include:
- If you waived your contingencies
- You didn’t pay attention to the timeline that was outlined in your contract
- You get “cold feet” about buying, even if there’s no problem with the property or your financing
How to Protect Your Earnest Money Deposit
Never, ever give your earnest money deposit directly to the seller.
- Make the deposit payable to a real estate brokerage, law firm, escrow company, or title company, not the seller
- Get a receipt for your deposit
- Don’t authorize a release of the money until your transaction closes
Are You Buying a Home in Grand Junction?
Call us at 970-765-4135 or get in touch with us online to tell us what you want from your dream home. We’ll help you find it.
In the meantime, check out our:
- Grand Junction homes for sale under $100k
- Grand Junction homes for sale between $100k and $200k
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- Grand Junction homes for sale between $900k and $1 million
- Grand Junction homes for sale over $1 million