Bottom line: If they follow the letter and spirit of the contract, buyers can usually get their earned money back if they want to retire from the company. Honestly, you`ll probably never see that money again. But don`t worry! The deposit would be part of the entire deposit if the seller accepted your bid. (If you put 0% on a VA loan, buyers can recoup the down payment at closing.) Yes! This is called a “deposit” for serious money because it is an initial payment for the purchase of your home. So, if everything goes well and your offer is accepted by the seller, the amount you paid in serious money will be used for the down payment and closing costs (in most cases), which will make it a part of your real estate investment. When it comes to the notion of “non-refundable”, brokers often create inconsistencies in purchase contracts. If a buyer has a financing contingency (Form 22A) or the right to terminate under the Seller Disclosure Act or the Title Review Contingency (Form 22T) or other legal excuse for termination, and also agrees that the funds are “non-refundable”, who is entitled to the funds if the buyer correctly terminates the purchase agreement based on a legal excuse? The seller will believe that the seller is entitled to the funds. If not, what was the purpose of the term “non-refundable”? The buyer will believe that the buyer is entitled to the funds. If not, what was the purpose of the eventuality or legal right of termination? The confusion is obvious, but brokers too often draft purchase contracts with these internal conflicts by simply adding a note stating that the funds are “non-refundable”. Fortunately, this custom has slowly been replaced by serious electronic deposits of money – often directly from the buyer`s phone.

Earnnest, for example, is a digital platform that allows the secure deposit of funds from the buyer directly to the escrow company. The app offers a fully digital closed network for serious money transactions. Other applications used locally include Zoccam and a proprietary software application developed by Fidelity National Financial that owns three securities and escrow companies in our region. Serious money conflicts are rare, but they can occur. As a home buyer, it`s important to understand how these deposits work. Work closely with your real estate seller to ensure you include the necessary contingencies in your offer to purchase to protect your serious cash deposit. Your agent should be very familiar with this process. If the buyer gives serious money to the buyer`s broker, the buyer`s broker must hand over the serious money to the agreed owner of the serious money within three days of receiving the serious money or within three days of mutual acceptance, whichever is later. For example, if the buyer gives the broker a check for the money earned on Monday, if the buyer writes an offer, but the offer is not accepted until Wednesday, the buyer`s check must be given to the agreed holder of the money earned no later than three business days later, on the following Monday (assuming a normal week without holidays). Suppose the buyer broker collects the buyer`s serious money at the time the buyer signs the buyer`s offer. Buyer Broker has a separate obligation to protect the buyer`s funds.

DOL requires the buyer`s broker to deliver the serious money within three days of receipt. If the buyer and seller reach mutual acceptance within these three days, so that the broker can simply deliver to the owner of the funds, then so be it. But if the buyer and seller are still trading three days after the buyer writes the serious money check, the buyer`s broker must give the serious money check to the broker`s manager of the broker to keep it in a safe place. The buying broker and the managing broker are then required to ensure that the cheque is deposited in good time after mutual acceptance. It is true that in recent weeks, between mutual acceptance and receipt of keys, many problems can arise. In many cases, a deposit will be refunded after the buyer backs down due to a defect or other issue raised during the home inspection. There are other times, for example, when the buyer cannot get financing. In most of these situations, buyers can use the specific emergency addendum in the agreement to withdraw the offer and receive a full refund.

(When a check has been deposited, the escrow usually transfers money to the buyer`s bank account or writes a new check in return.) Again, there is no single answer to this question. It would be a mistake to believe that a buyer`s broker should always avoid collecting a serious cash check at the time the buyer makes an offer. On the contrary, if the buyer`s broker can collect the serious money check at the time the buyer drafts the offer, the buyer`s broker has the greatest control over the result of the deposit and the broker and seller enjoy the safest level of protection in terms of deposit and proof required. Serious money. Sellers will be compensated for their time and effort if a purchase and sale contract does not work due to the expiration of the buyer`s serious funds. The Northwest Multiple Listing Service Form 21, also known as a residential real estate purchase and sale agreement, states in paragraph (b) that the buyer must either: (i) return the money earned within two days of mutual acceptance of the agreement to the selling broker who deposits each cheque with the selling company; or (ii) deliver any serious funds that will be held by the Closing Agent within three days of receipt or mutual acceptance of the Agreement, whichever comes later. If the buyer does not close, the seller can keep an amount of up to five percent of the purchase price as serious money. RCW § 64.04.005(1).

Serious money is the down payment that a home buyer deposits in advance when they make an offer to buy a home. The goal is to show the seller that you are “serious” (an old-fashioned word for serious) when it comes to buying their home. Once the seller accepts the offer, he can no longer change his mind (by signing), he can no longer accept other offers. The seller needs to be reassured. The deposit of serious money shows your good faith in buying the house and your intention to move the business forward. Therefore, it is also called a “bona fide” deposit. This issue is one of the oft-cited omissions that lead to disciplinary action by the DOL. Brokers do not have the necessary receipts or other evidence in the transaction records and/or brokers have no evidence that in the event that the buyer did not make a deposit in a timely manner, the seller was informed of the buyer`s failure. .