When Closing A Real Estate Transaction - What Is Earnest Money?

Earnest money is the deposit made by the buyer when the offer is submitted. The amount of paid varies from transaction to transaction.

Perhaps the main purpose of paying "earnest money" is for the buyer to prove to the seller that he or she is a genuine buyer who is serious about wanting to buy the property.

When the offer on the property is submitted, the earnest money will be put into an escrow account by either the buyers real estate broker, the sellers broker or the title company.

If the offer is accepted, the earnest money will be applied to the down payment or closing costs.

If your offer is rejected, your money will be returned to the the person who made the offer.