Earnest money is a deposit that a prospective buyer provides to the seller to show good faith that the buyer plans to complete the transaction. This money is held in a Trust Account until closing. The money will be applied to the amount that the buyer owes, in other words it will be credited to the sales price amount. So if the buyer purchases a home for $100,000 and provides $500 in earmest money, the buyer would now owe $99,500 to be paid at closing. Earnest money is not essential in a home purchase, but many sellers will not accept an offer without it. The earnest money ensures the sellers that the prospective buyers are making a serious offer. If either party defauts (fails to follow through) on the home purchase the disbursement of the earnest money will be held in the Trust Account until it can be determined who should receive the money.
Call one of us for all of your real estate needs: Lisa Baumberger 208-5560 or Krista Bailey 519-3653
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