By REsides, Inc. on 6/20/2022
When a buyer and seller enter into a purchase agreement, the seller will take the home off the market while the transaction moves through the entire process to closing, which can take several weeks. If the deal falls through, the seller has to relist the home and start all over again, which could result in a significant financial loss. Therefore, as you near the process of making an offer on a home, your real estate agent will want to discuss your Earnest Money, a form of security deposit also known as a “good faith” payment. Earnest money shows the seller that you’re acting in good faith and committed to buying their home, and provides them with some compensation in case you back out of the deal without a valid, contractual reason.