Earnest Money Deposit
REGARDING: Earnest Money Deposit [EMD]
[Questions and Answers]
What is EMD?
EMD is the upfront stated monies that a buyer proposes to pay upon an accepted and fully executed purchase agreement to show good faith that the buyer has earnest and good intentions to fulfill the terms of the purchase agreement.
If I do fulfill the terms of my agreement, do I lose or keep my EMD?
You will keep your EMD. Your EMD will be credited to you with the purchase. It will be credited to the home purchase price/closing costs/loan down payment. This means that you do not lose it....you keep it. You will see this credit as a line item on the Settlement Statement.
In what form is the EMD?
The EMD is usually in the form of a bank wire.
The bank wire is sent to the Title Company within one business day of accepted offer.
Wire Instructions are supplied by the Title Company.
Where is my EMD held?
Upon acceptance of a fully executed purchase agreement, the EMD is wired to the Title Company within on business day. The Title Company is an unbiased, neutral, third party company that carries out the instructions of the purchase agreement.
When is my EMD cashed?
EMD will only be cashed upon mutual acceptance and a fully executed purchase agreement by both the buyer and the seller. Only at this time the EMD is submitted to the Escrow Company for accounting and handling.
Can I ever lose my EMD?
Only if you default on the terms of the Purchase Agreement. A default is when a purchase agreement is cancelled outside of the agreed buyer contingencies.
Please note that if you cancel the purchase agreement within the agreed buyer contingencies and terms of the Purchase Agreement, then your EMD will be refunded back to you.
How much should my EMD be for?
It depends. Customarily no less than 3% of the purchase price....but you may offer more EMD to poise yourself with a stronger offer to help ensure that you get the home.
Should you have any questions, please feel free to contact me. :)
Julia St. Marie, ABR, RRG, RSPS