who gets earnest money when buyer backs out

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My advice is to follow the local custom when making your earnest money payment. Offer the average amount — no more and no less. That way, you won’t risk insulting the sellers. Nor will you have an unusually large amount of money on the line if you back out of the deal. When does the buyer get the earnest money back?

After the due diligence period, the buyer can still get their earnest money back if they get declined for their loan for any reason. Financial contingencies, on average, run between two and three weeks from the binding agreement date.

It depends on why the buyer is backing out. The buyer has a certain period of time to inspect the property. If he/she backs out within the alloted period of time for legitimate reasons (as outlined in the purchase agreement) the buyer gets his/her earnest money refunded.

 · In short, if the buyer sends notice to the escrow company to release the funds, the seller has 15 days to respond with a legitimate reason to object to the release. If there is no legitimate reason why the funds should be withheld, the escrow company will release the funds back to the buyer. Earnest money disputes are rare, but they can occur.

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Earnest money gives sellers monetary assurance that a buyer won’t back out of the contract without valid cause. Most contracts have contingencies that allow buyers to walk away from a home. Two examples are if the house can’t pass inspection or the buyer can’t qualify for financing.

Q: My buyers have excellent credit, no debts and a lot of money in the bank, but the lender can’t fund the loan because it’s missing one piece of paper from the appraiser. All contingencies have been.

When a real estate buyer agrees to provide an earnest money deposit to a buyer and does so through his real estate agent of broker, the agent has to handle that money responsibly. south carolina code section 40-57-135(4) states that upon receipt of the earnest money, the broker must deposit it into a separate real estate trust account within 48 hours, excluding Saturday, Sunday and any bank holidays.

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