Earnest money is a good faith deposit put up by the buyer to commit them to the transaction. Often the real estate agent will hold onto the earnest money, and we will make sure the provisions of the contract provide what happens to that earnest money. Often we will have a client put that earnest money with the title company if there is no real estate agent.
Earnest money deposit is very important, because then the buyer has “skin in the game” (something to lose), and the seller wants to keep the buyer’s feet to the fire until the buyer actually closes on this transaction.
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