Earnest money is a deposit you pay when you make an offer on a home—it’s a way to show the seller that you mean business. Usually you can’t get it back, but there are several circumstances that allow you to recover your earnest money, here’s a few for you!
- Appraisal contingency: With an appraisal contingency, you can recover your earnest money if the home is appraised for less than your offer. This gives you a better negotiating position—if the seller doesn’t agree to a lower price, you can get your earnest money back and walk away from the deal.
- The seller backs out: Obviously, if the seller changes their mind about the transaction—maybe they decide not to sell, or accept a higher offer—you get your earnest money back.
- Your house hasn’t sold: Many buyers can’t afford a new home if they’re still financially responsible for their old one. In this case, you can work a sale contingency into the contract, and get your earnest money back if the home doesn’t sell soon enough.
- Financing issues: Though there are some limits on financing contingencies, you can get your money back if you’re unable to get a loan.
I’m happy to help!