Earnest money is typically a good-faith deposit ranging from 1% to 3% of the home's purchase price, held in escrow and credited toward the buyer's down payment. Whether earnest money is refundable depends on the purchase agreement terms, including specific contingencies that protect the buyer. Buyers can often reclaim earnest money if major issues arise during a home inspection, or if they are unable to secure financing despite having pre-approval. Various factors dictate its refundability, rooted in contractual protections.
Earnest money is a deposit indicating a buyer's serious intent, typically 1% to 3% of the purchase price, generally held in escrow.
Earnest money is often refundable if specific conditions in the purchase agreement are met, particularly through protective contingencies.
If a home inspection uncovers significant issues and a contingency is in place, the buyer can withdraw from the sale and retrieve their earnest money.
A financing contingency allows the buyer to back out and reclaim their earnest money if they cannot secure the necessary home loan.
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