In a perfect world home buyers and sellers would shake hands on a deal and meet at the closing table to close the deal. The real world is not that simple. Earnest money is a sign of the buyer’s “good faith” to follow through with the purchase contract. By and large sellers in the greater Cincinnati don’t demand high earnest money deposits from potential buyers. (Of course there are always exceptions.)
Buyers (and sellers) need to understand the basics of “earnest money” so they don’t lose money or worse.
Example of earnest money clause in purchase contract
The first mistake a buyer can make is not reading the contract clause covering earnest money in order to understand how the check is handled. The earnest money check is immediately cashed and deposited into the real estate broker’s trust account. Some buyers assume the check is “held” until closing and don’t have sufficient funds to cover the check. By law- checks are deposited within a fairly short time frame.
The majority of the real estate deals in greater Cincinnati get to the closing table. When it comes to earnest money buyers need to remain vigilant and never assume the deposit is automatically returned prior to closing. And both buyers and sellers should always consult with their attorney prior to “walking away” of any type of legal contract.