If you are interested in purchasing your own home, you may have heard a lot of talk about earnest money agreements. An earnest money agreement is a set amount of money that is paid to the seller as a way of showing that they are indeed good for the money it will require to pay for the home. If the purchase agreement fails, your check will not be deposited.
The reason earnest money agreements occur is to compensate the seller in the case that the transaction does not work out. Often this is a huge inconvenience to the seller and therefore requires that they be compensated. This is agreed upon when signing the contract before paying your earnest money agreement.
Before you sign anything, however, we would suggest having a lawyer look over your contract. The earnest money should be as little of an amount as possible. Secondly, once the inspection deadline has passed, you should try to tender the money. And lastly, you want to ensure that the contingencies are going to protect the earnest money. If the other party does not hold up their end of the deal, you may not have to either.
Real estate law is very complicated for those who are not familiar with it. If you have questions or concerns regarding an earnest money agreement or any part of the process as you are buying a home, contact Pavithran Law today for more information. We are always here to help and will make sure all of your concerns are dealt with before you leave our office.