Earnest Money Deposit?? When you put earnest money down do you get that back after closing???

Question

what is earnest money? can it be considered part of the down payment of the house?

Answer 1

If you break the contract you dont get the money back. It goes to your closing costs if you go through with the purchase

Answer 2

Earnest Money Deposits are referred to as good-faith deposits or binder deposits, or rent deposits and security deposits if your renting. It's a deposit on the home that you are buying. It goes towards the cost of the home when the property closes. It's an amount of money that you are putting down on the home that shows the "Sellers" that you are intrested in their property and your not going to change your mind about their property for no valid and legal reason because you will agree (in most cases) to forfeit that amount of money to them if you fail to live up to your end of the agreement/contract. When someone agree's to sell their home to you for a certain amount and takes that property off the market, they are doing so with the understanding that you are going to buy it. During that time between your contract and the closing, they are still maintaining that home and are no longer offering that home or property to other potential "Buyers". Because there is a risk that you could change your mind and they could have had other successful deals during that time the Earnest Money Deposit is a safety net for the "Sellers" that you won't back out and leave them stranded, leaving them to start all over again for no reason. It's also a very good negotiation tool when your looking to purchase your home. If there is a particular home that you really really want, offering a hefty "Earnest Money Deposit" could make the difference between the "Seller" accepting your offer over someone else's.

Good Luck and Best Wishes on your purchase!

Answer 3

The earnest money goes toward closing costs. If the seller is paying any or all of your costs, you can get the maximum of your earnest money back. If you bring too much to closing, it is possible to get it back as well.

Answer 4

When I bought my house in 2002, the earnest money deposit was applied to my down payment. You could say that I got it back because it is now part of my equity.

Answer 5

The earnest goes towards closing costs.

Answer 6

If you want it back, make sure you let your realtor and lawyer know, they'll have to indicate in the contract that you want it back. Otherwise it will basically be a downpayment on the house.