Return earnest money nc real estate

Since payments made before closing are not treated the same in all transactions, it is important to understand the purpose of earnest money and how it will be handled during the transaction.

This is usually spelled out in the offer to purchase or sales contract. The questions raised in this publication are of special concern to real estate purchasers. Consequently, they are posed from the standpoint of the purchaser.

Do I have to pay an earnest money deposit to have a valid contract? Although no law requires it, sellers typically do require it. How much earnest money should I pay? The amount is negotiated between you and the seller. It is typically a small percentage of the purchase price and can vary depending upon local market conditions, the price of the property, the type of property e.

What happens to the earnest money before closing? The purchase contract governs where earnest money will go. It should also specify the amount s to be paid, when the payments are to be made, whether the money will be held in a trust escrow account, who will hold it, whether it will be credited against the purchase price at closing, and what may happen to it if the transaction does not close.

Will my earnest money earn interest between contract and closing? Most earnest money is held by real estate brokers in non-interest-bearing trust or escrow accounts. In order for the money to earn interest, the buyer and seller must agree, and they also must determine who will earn the interest.

Such an agreement should be included in the purchase contract and may require the assistance of an attorney to prepare.

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Any person or entity agreeable to you and the seller, but usually a licensed real estate broker. Consequently, most buyers prefer to have real estate agents or attorneys hold the earnest money deposit.

Since they are licensed by the state and required to deposit the money in a trust or escrow account, this reduces the risk that the monies will be improperly used. The form permits the parties to select who will hold the money — typically, the listing firm.

Whenever a licensed real estate firm or agent holds any earnest money, it must be deposited in a trust or escrow account until closing. However, if any addenda are used with the form, check to see whether they conflict with any provisions in the form concerning who will hold the earnest money or other pre-closing deposits.

What if the standard contract form is not used? Generic contract forms are also commonly available and can now be found on the Internet.

Many will require you to make an earnest money deposit or similar deposit, but they may differ from the standard form in how it is to be handled.

For example, unlike the standard Offer to Purchase and Contract form which contains inspection and repair provisions, title requirements and other protections, there may be no provision allowing you to obtain a refund of the earnest money under any circumstances.

Therefore, you must read every contract form carefully and consult with your attorney if you have questions. Probably; however, most purchase contracts do not have a rescission period.

Only in certain kinds of transactions will you be allowed for a limited time to cancel the contract. These transactions include developer offerings of condominiums, timeshares, and interstate land sales; and where a seller fails to give you certain disclosures in a timely manner, including the Residential Property Disclosure Statement and, for properties built before the lead-based paint disclosure.

These rescission rights are usually created by state or federal law. The amount of time varies but is typically only a few days. You should consult your own attorney about rescission rights in such transactions. Although there is a federal law that gives you three days to cancel a home loan commitment, it does not give you the right to cancel a purchase contract and get a refund of your earnest money.

Your obligation to purchase as set forth in the sales contract is unrelated to your right to obtain the best possible loan or avoid a loan that has hidden conditions. Even if the sales contract has a financing contingency clause such as the one found in the standard Offer to Purchase and Contract form , your cancellation of an approved loan is not one of the conditions that would release you from the sales contract. U nder the standard Offer to Purchase and Contract, do I get my earnest money back if the transaction does not close?

These may include the requirement that you make a good faith effort to obtain necessary financing or to sell your own property; or that the seller make certain repairs and provide good title.

How long does the return of Earnest money take (agent, commission, fees) - Real Estate -Brokers, appraisals, development, lease, investing, relocation, apartments, houses, condos, values, mortgages, loans - City-Data Forum

If the seller does not meet his requirements, you may be entitled to a refund. On the other hand, if you breach the contract, you may forfeit the earnest money deposit. If your purchase contract does not close, you should consult your attorney over the remedies that may be available. What if a contract fails and the seller and I cannot agree on who is entitled to the earnest money?

The parties may also resolve disputes through voluntary or court-ordered mediation. If an attorney for you or the seller holds the earnest money, the attorney must hold or dispose of the funds in accordance with the rules of the North Carolina State Bar.

When a form other than the standard Offer to Purchase and Contract is used, it may allow the seller access to the money whether or not the closing occurs as scheduled. In any event, while a broker is not allowed to pursue a claim for earnest money for you, the broker may appear as a witness in court and make documents available.

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Who can hold earnest money? This information courtesy of the North Carolina Real Estate Commission. Emerald Isle Office Mangrove Drive, Emerald Isle, NC Real Estate Rentals Atlantic Beach Office Atlantic Beach Causeway, Atlantic Beach, NC Real Estate Rentals Website Services and Consulting provided by LSI. All information on this site is deemed reliable but is not guaranteed.

All reasonable efforts have been made to ensure that the information on this website are accurate, however, Bluewater Associates of Emerald Isle, Inc.

Broker-in-Charge BIC owns or has an interest in properties managed by Bluewater Associates of Emerald Isle, Inc.