Earnest Money – David Reecher
Earnest money is the money a potential buyer puts down to show that he or she is serious about making an offer on any potential real estate sale. This money, which is usually no more than two percent of the asking price, is meant to show the seller that the buyer is earnest about their offer. If the sale falls through, the seller normally will return the check to the buyer. However, there are cases in which all or part of the earnest money could be kept to cover any cancellation fees which may incur. For this reason, it is important that the buyer makes sure he or she understands the legal restrictions which may occur in their state, particularly if the cancellation occurs late in the transaction. An experienced real estate agent should be able to help explain these restrictions.