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DISBURSEMENT of EARNEST MONEY Form
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Is earnest money refundable
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Who gets earnest money if deal falls through
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People also ask
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What does disbursement of earnest money mean?
The earnest money is disbursed at closing. Buyers usually put it toward closing costs or the down payment. You may have to forfeit the earnest money to the seller if you break the terms of the purchase agreement.
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What typically happens to the earnest money deposit?
Typically, you pay earnest money to an escrow account or trust under a third party, like a legal firm, real estate broker or title company. Acceptable payment methods include personal check, certified check and wire transfer. The funds remain in the trust or escrow account until closing.
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How does earnest money get refunded?
If the Buyer defaults, then the earnest money goes to the Seller. If the transaction is cancelled due to a Buyer Contingency (such as a financing not obtained or an inspection revealing an unacceptable condition) not met, then the earnest money is returned to the Buyer.
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How is earnest money distributed?
In most cases, earnest money is delivered when the sales contract or purchase agreement is signed, but it can also be attached to the offer. 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.
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Who gets earnest money when buyers back out?
The earnest money deposit serves as the liquidated damages amount in real estate contracts. If the buyer defaults, the seller can keep the deposit regardless of the actual amount of damages. That also means that if the damages are higher than the liquidated damages – you're out of luck!
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