Here's what earnest money is and how it can sometimes be refundable.
I’m often asked about what earnest money is and whether it’s refundable. It’s a deposit made when you write a contract. It goes to the title company and is held until closing. Earnest money secures the contract and tells the seller that you're serious about purchasing. In our area, it's usually about 1% of the purchase price.
Earnest money is refundable in several cases. There are contingencies built into almost every contract such as inspections, appraisals, loans, surveys, and title work that will let you get your earnest money back.
If those contingencies are removed and you change your mind at the last moment, that would be a situation where you most likely would lose your earnest money. Be sure about the house you're purchasing, investigate it during your contingencies, and be sure that you'll get your financing. Don’t make any big purchases at the last moment that could change your financial situation if you're under contract.
I'm here to help you navigate the nuances of contracts to make sure that you and your earnest money are safe. If you have any questions, please give me a call at 505-603-2435. I look forward to hearing from you.