When you are purchasing a home you will put down earnest money towards the contract to purchase the property. The earnest money varies from contract to contract and can be dependent on the current real estate market. The earnest money itself is money paid to confirm a contract.
The earnest money is held by a third party escrow company according to the terms of the real estate purchase contact.
In most cases the earnest money is credited towards the closing costs of the purchase. If the buyer cancels the contract prior to the date listed on the contract, they will get the money back. If it is after that date, then the money is not returned.
- Earnest Money is given to an escrow company at the time of an accepted REPC.
- At closing, the earnest money is credited towards the down payment and / or closing costs.
- If there are no closing costs or down payment, the earnest money is refunded back to the buyer.