Earnest money is the cash deposit that a home buyer puts upfront when their offer is accepted on an Albuquerque Homes. It is proof of their seriousness that they will honor the contract and close on the purchase.
A personal check is usually written at the time a home buyer writes an offer on a house. The buyer’s agent will then photocopy the check and send the photocopy along with the offer paperwork to show the listing agent that their buyer has earnest money funds.
Once the offer has been accepted, the buyer’s broker delivers the check to the title company. The title company will cash the check right away.
Assuming the transaction closes, the buyer gets their earnest money credited back towards their downpayment and/or closing costs.
If the transaction does not close, the buyer may or may not be entitled to getting their earnest money back. It depends upon the exact situation and the reason for contract termination.
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