Earnest Money - When Is It Due and How Much Is It? PDF Print E-mail

Earnest Money - When Is It Due and How Much Is It

This is what the GAR Purchase and Sale Agreement says:

Amount and Deposit of Earnest Money. Buyer has paid to ______________________________________ (“Holder”) earnest money of $______________________________ check, OR $_____________________________ cash, which has been received by Holder. The earnest money shall be deposited in Holder’s escrow/trust account (with Holder retaining the interest if the account is interest bearing) within 5 (five) banking days from the Binding Agreement Date. If Buyer writes a check for earnest money and the same is deposited into Holder’s escrow/trust account, Holder shall not be required to return the earnest money until the check has cleared the account on which the check was written. In the event any earnest money check is dishonored by the bank upon which it is drawn, Holder shall promptly give
notice of the same to Buyer and Seller. Buyer shall have 3 (three) banking days after receiving such notice to deliver good funds to Holder. In the event Buyer does not timely deliver good funds, Seller shall have the right to terminate this Agreement upon notice to Buyer.

 

So, as you can see, you will need to give earnest money to your agent WHEN you are writing the contract. And, the agent will turn the money into their broker and the check will be deposited within 5 banking days. Earnest money is usually 1% of the asking price. Some circumstances will allow the earnest money to be less.

 
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Rhonda Duffy
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