IS IT POSSIBLE TO LOSE MY EARNEST MONEY?
It is a rare occurrence for buyers to lose their earnest money, but it could happen if due diligence is neglected. This is why you should never be tempted to the extent of deciding to represent yourself in a real estate transaction. Real estate is a complex industry and only an expert can understand the nitty-gritty of the legal and documentation processes involved. Hence, if you don’t want to kiss your earnest money goodbye, you must engage a trusted real estate expert when planning to buy a home.
In the most cases that home buying transactions fall apart, the circumstances are often beyond the buyer’s control. With the aid of a competent real estate agent, you will be able to get your earnest money back without much hassle. You can only lose your earnest money to the seller if you willfully decided to rescind your offer without any legal reasoning to do so.
If you care to know some of the reasons why you may lose your earnest money, here is a brief insight into some of the conditions. You should be aware of these conditions before sending an offer to a seller so you won’t be a victim.
- If you waived your contingencies
You will get your money back if the financing is not approved or if you discover a defect during the home inspection. However, if you waive all your contingencies and abandon a deal due to market competition, you may be in a serious risk of losing your earnest money.
- If you ignored the contract timeline
There must be a specific timeframes in your contract to secure financing and do the inspections. If you, however, decide to void the contract after the expiry of these deadlines, you could lose your deposit. You can make a request in writing for a contract extension if you need more time for any reason at all.
- If you change your mind
The earnest money you deposited serve as a protection for the seller for deciding to take the home off the market due to your offer. So, if you grow cold feet for no reason that could be linked to property defect or loan approval, you may not be able to get your deposit back. In this case, the seller has the legal right to sue you for a breach of contract. You may be asked to bear the additional costs that the seller has incurred in the process, which could be more than your initial deposit. So, you need to be careful when buying a home by ensuring you engage a trusted real estate professional who understands the intricacies of the industry.
- If you lie about your financial situation
You may lose your earnest money if you failed to represent your financial situation honestly. If you’re making offer, make sure you are basing your ability to purchase the home on incomes and assets that are real. If otherwise, you may be charge for fraud. So, make sure you represent your financial position truthfully if you don’t want to lose your earnest money.
If you live in any of the cities in Coachella Valley and you’re interested in buying a home in the neighborhood, you can contact me for a most reliable professional real estate advice you can find on the market.
What is the next step?
As I mentioned earlier, consulting with a professional will avoid legal problems and unexpected extra expenses so remember that you can call my mobile phone at
or subscribe to the electronic bulletin so you can receive updated information and you can have a professional by your side.
If you have any questions you can contact me or send me a message from the contact page.