Your Chattanooga real estate agent may say that you must provide earnest money when making an offer for a home. It’s usually in the form of a check, and the funds will be verified by your mortgage company prior to final approval of the loan.
This earnest money reassures the home seller you’re indeed serious about the offer you’re making. Once the terms of the deal are worked out between you and the seller, the earnest money is placed in an account held in trust until your loan closes. Then the money will be used for your down payment and closing costs.
What if the Deal Falls Through?
If the deal falls through at any time, any cancellation fees are paid out of the earnest money. The remainder of the money continues to be held in trust until you and the seller agree on the disbursement of the money. If the deal is canceled early in the process, it’s usually a simple matter of the seller signing over the deposit to you.
What if You Cancel the Transaction?
If the transaction is canceled by you, the buyer, some sellers mistakenly believe that the earnest money is forfeited to them. That’s not likely to happen because no buyer is going to let the seller just have the earnest money. Because the money is held in a trust and both parties must sign a release of escrow, no one can make you give the earnest money away. In this situation, work with your Chattanooga real estate agent to help you negotiate the return of your earnest money.
What if an Agreement Cannot Be Reached?
If the buyer and the seller are unable to come to an agreement about the earnest money, the broker holding the funds in trust can make a written judgment and disburse the money. If the broker is unable to make a determination, he or she can turn the money over to the State’s real estate commission to make a decision. Rarely does a court of law have to be involved.
For more information on earnest money or answers to any other questions you have about buying Chattanooga real estate, call me at 423-488-1882 or email me at firstname.lastname@example.org .
KEYWORD: Chattanooga real estate
Down payment: http://www.nolo.com/definition.cfm/term/FF59FEA0-C558-4703-8F70C42FE3CA7A7E
Earnest money: http://www.answers.com/topic/earnest-money-2