In the previous post we talked about “What is an earnest deposit?” In today’s post we are going to discuss what happens to the earnest deposit if you don’t end up completing the purchase of the home.
The “Buy and Sell Agreement of the Greater Kalamazoo Association of REALTORS” allows for the buyer to receive the full amount of the earnest deposit back if the sale is not completed UNLESS the buyer defaults on any portion of the contract.
One example I am asked about regularly is “If I (the buyer) cannot get a mortgage from the bank will I get my earnest deposit back?” In this case, yes. However, most sellers require either proof of funds (cash offers) or a pre-qualification letter (financed offers) to accompany the offer to purchase the home. So even before you (the buyer) write an offer on a home you should know whether or not you can get a mortgage.
Be sure to read tomorrow’s post: “What is a pre-qualification letter and where do I get one?”