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A lot of people are curious about the details of earnest money deposits, so today I want to lay out some of the things you can expect from this stage of the real estate process.
A typical deposit is going to be 1% to 3% of the price of the home. When the offer is accepted, the deposit typically goes to escrow. It’s supposed to be wired in, and it usually gets there in about three days.
If the buyer cancels the agreement within their rights, they will get the deposit back. If the buyer inspects the home and is not satisfied with it, they can canc
el and get their deposit back; they can do this through their right to an inspection contingency. If they end the agreement without having the right to do so, they are subject to losing the deposit. The way they lose it is either by agreement or a court order.
The deposit is held by a neutral third party, called the escrow company, which can only release the deposit to the buyer or seller if both parties agree or if there is a court order. We are not certified to offer legal advice, so we highly recommend consulting with an attorney.
If you have questions about this or any other real estate-related topic, please don’t hesitate to reach out to us. We would love to hear from you!
