Earnest money shows you’re serious
Typically when an offer to purchase a house is made, you, as the buyer, will also pay an “earnest money” deposit. This deposit shows the seller that you’re serious about the offer to purchase the property.

The amount of earnest money deposit varies based on the type of property being purchased and local market conditions.  As your real estate professionals, we’ll help you determine the appropriate amount to pay as an earnest money deposit.

The sales contract will dictate who holds the earnest money.  Usually the seller’s real estate agent will deposit the earnest money in a trust or escrow account until closing.   At closing, the earnest money is applied to the purchase price.

In the event the sale doesn’t close, the sales agreement generally spells out the conditions under which you would forfeit the earnest money.  Generally if the seller meets all the terms of the contract, the seller will keep the earnest money.  If the seller does not meet the terms of the contract, you, as the buyer, may receive a total or partial refund of the earnest money. 

In the Fargo/Moorhead market it is uncommon for disputes regarding the disposition of earnest money unless the seller(s) change their minds about selling or the buyer(s) change their minds about buying.  In the event that an Inspection is unsatisfactory to the buyer or the buyer is unable to obtain financing, the earnest money is generally returned within a short period after the problem is disclosed.  Both parties must sign a "Cancellation of Puchase Agreement with a Release of Earnest Money" in order for the listing agency to refund those dollars.