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Earnest money is used to show that the buyer is serious about the home and is going into the contract in good faith. The money is held in an escrow account until closing by a third party such as a title company. If you back out of the deal and do so for a reason that was not explicitly included in the contract, you could be out your earnest money. Contingencies and Backing Out

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Getting back your earnest money If you’re the buyer in a real estate transaction and want to back out of the deal, it’s important to know how to get your earnest money back. Depending on the terms of your contract, that money could be held in escrow by a title company, broker, bank or attorney.

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Depending on where you live, you can expect to put down anywhere from 1% to even 10% of the home’s purchase price as earnest money. (In some highly competitive markets, buyers are making even larger deposits in an effort to stand out.) An earnest money deposit tells a seller you are serious about closing.

Yes, a buyer can back out of a sales contract before closing – but what are the consequences. Buyers typically put down an earnest money deposit , between 1-10% of the sales price of the home. If the buyer backs out, they may have to forfeit part or all of this money, depending on the terms of the original sales agreement, including.

If closing is when you officially get to own the house, can you back out prior to closing? Find answers to this and many other questions on Trulia Voices, a community for you to find and share local information. Get answers, and share your insights and experience.

Now I usually do more earnest money so I would maybe go after it, but back then I didn’t. If the seller backed out to went around my back or something that would be a different story, but both times they ended up not moving in with their boyfriend/girlfriend or whatever their plan was. I can afford to put the closing money in escrow if I really.

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