Money that accompanies the purchase agreement to show that the buyer is serious about buying the property, sometimes called a deposit. These funds are not in addition to the purchase price, they end up being put toward the purchase.

Buyers can lose their earnest money by backing out of the deal after the purchase agreement has been accepted by both parties. Lately I have been running into some problems with earnest money. We received earnest money from a buyer of one of my listings and the check bounced. Even though the money is not spent until the closing state law says that they have to go into a real estate brokers trust account with in three business days. I am also noticing that earnest money checks are getting smaller all the time.

Gabriel Law Office, PLLC – St. Paul, MinnesotaEarnest Money - Gabriel Law Office, PLLCEarnest Money - Gabriel Law Office, PLLC - St. Paul, Minnesota

Locally first time home buyers can usually get by with between one and two thousand dollars. Then there is the real estate industry with our business practices and traditions. Earnest money is paid by check. Bills are paid online and for everything else there is the Visa check card. I write maybe 7 or 8 checks a year, and seldom know exactly where my checkbooks are and never carry them with me.

I have clients who do not use checks either. Buyers should locate their check book before making and offer and if necessary practice writing checks if they have forgotten how.

I could post instructions, but I am not sure I remember the correct way to write a check. I learned the lesson Earnest Money the hard way. We went to sell our house in July and got an outstanding offer within 9 days. The buyers agent said they had nothing to sell and that they were an older couple.

We granted them two mortgage extentions becuase supposedly a form was being held in underwritting. A week before we were supposed to close, we moved into an apartment as we were having a house built.

That would have dramatically made our loss less! Schoppe — you bring up another good point that I am writing a post about, the pre-approval letter. We call the lender who says the borrowers are as good as gold and then get a nasty surprise. You are also correct in your idea about the earnest money being enough to cover an extra months mortgage or rent of the deal falls through.

Thanks for the comment. But what happens when the earnest money check bounces? We recently received an offer on our home with a sizeable earnest money check — both parties signed off on the purchase agreement, and the buyer even signed an addendum stating that his earnest money was non-refundable after a certain date this was done because the time between signing the PA and closing was only a few weeks.

But we are still going back and forth, with the buyer saying that he is still interested, etc. Meanwhile we have nothing to show for his breach of contract! What are our rights?! By MN law the broker has 3 days to deposit the earnest money after the final acceptance date on the purchase agreement.

How much did this cost you? I really needed to sell. He wanted to close in 3 weeks. I won in small claims. This well avoid the confusion among the buyers at the time they decide to buy a property.

It ends up paying part of the cost of the house of back in the hands of the buyer or the seller gets it. Paul Realtor, and the Broker and owner of Boardman Realty. I help people buy and sell houses. Home About About Contact Boardman Realty Agents Wanted How much is your home worth? Buying a home Resources Photography Home Prices Neighborhoods Neighborhoods The West 7th neighborhood Homes For Sale For Sale Listings.

Paul Real Estate Blog. First Time Home Buyers For Home buyers. Nothing Says Earnest Like Money Posted on September 26, by Teresa Boardman.

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- Minnesota Statutes

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