Earnest Money is a deposit by the buyer to show the seller that they intend to purchase a home. This shows the good faith of the buyer and that they have the funds to purchase the property.
Most brokers will only allow checks or money orders for earnest money and will not take cash. This is to protect everyone involved.
The Earnest Money once deposited into the Escrow Account, will then be used towards the final purchase price of the home.
If the sale does not go through as planned, the broker will relinquish the funds to the appropriate party. Who gets the earnest money after a transaction is not completed will be spelled out in the termination paperwork.
For more questions about Earnest Money, please reach out to us by commenting on the post or giving us a call.