money is a deposit made to a seller that represents a buyer’s
good faith to buy a home.
“Sellers don’t believe for a
second that earnest money given at the time an offer is accepted is yours”.
Once deposited, the funds are
typically held in an escrow account until closing, at which time the
deposit is applied to the buyer’s down payment and closing costs.
The deposit shall remain in
escrow until settlement or termination. If the transaction does not close the
EMD stays in escrow until (a) buyer and seller have agreed in writing as to who
gets the EMD (b) the courts determine who gets the EMD (c) the escrow agent
releases the EMD to the principal to the transaction who is entitled to receive
the EMD in accordance with the clear and explicit terms of the contract.
The EMD amount can be anywhere
from $0 to $10,000+. If the buyer and seller agree on a $500 EMD this
might now be enough to hold the buyers into the contract if they decide to
breach. The more EMD amount the more the buyers will be reluctant to back out
of a contract. Your real estate agent should be able to recommend an
appropriate amount of earnest money to go with a real estate offer.