What is Earnest Money? Where Does it Go? Can I Get It Back, or Lose It?
In this video, I talk about what your Earnest Money Deposit is and in what circumstances you can get it back or lose it.
In a nutshell, earnest money is a deposit to escrow which ends up as a credit to you at closing. Here are some ways you can obtain your earnest money back:
- Inspection – once the inspection is done and you don’t like what you have found out about the home and/or we cannot successfully negotiate with the sellers.
- Appraisal – if the appraisal comes in low from the bank and we cannot agree on a solution with the sellers, such as reduced price, meeting in the middle, or the buyer bringing more down payment.
- Financing – if your financing fails through no fault of your own such as job loss or reduction in job hours/wages.
Some ways you can lose your earnest money is if your financing fails due to your fault such as increasing your debt-to-income ratio because you bought a new car or financed furniture on credit, for example. Additionally, you can lose it if you simply decide you no longer want the home.
I’d love to know your thoughts on the video!
