Earnest money serves as a good-faith deposit for homebuyers, typically amounting to 1-3% of the purchase price. It demonstrates the buyer's seriousness and is held in escrow, often applied to closing costs or down payment. If a buyer breaches contract terms without a valid reason, a seller may retain the earnest money. Violations can include unauthorized access, failing to meet document deadlines, or changes in the financing arrangement without approval. Examples illustrate when sellers are entitled to keep the earnest money due to buyer noncompliance.
Earnest money is a good-faith deposit buyers make when submitting an offer on a home, typically ranging from 1% to 3% of the purchase price.
A seller may keep the earnest money deposit when the buyer fails to meet the terms of the contract without a valid, agreed-upon reason.
Violations of contract terms can include unauthorized access to the property, performing inspections without permission, or changing the financing structure without consent.
If a buyer misses contract deadlines, such as failing to provide a mortgage commitment letter on time, the seller may have the right to retain the earnest money.
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