On this Month's Cover:
1925 Adirondack Ct.
$289,900
MLS#: 98347

Presented by:
Tom Kuhn
Coldwell Banker United

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What is Earnest Money?
By SumterHomeGuide.com

Earnest money is a deposit towards the purchase of real estate made by a buyer to demonstrate that he/she is serious about wanting to complete the purchase. When a buyer makes an offer to buy residential real estate, he/she generally signs a contract and pays a sum acceptable to the seller by way of earnest money. The amount varies depending upon the state of the local market at the time of contract negotiations.

If the seller accepts the offer, the earnest money is held in escrow by the real estate broker until closing and is then applied to the buyer's portion of the remaining costs. If the offer is rejected, the earnest money is usually returned, since no binding contract has been entered into. If the buyer retracts the offer or does not fulfill its obligations under the contract, the earnest is forfeited. Therefore, it is generally in the seller's best interest to see as high an earnest money deposit as possible.