Real estate: What happens to the deposit made on an accepted purchase offer?

Question

If the money is part of the closing costs does that go to the seller?

Answer 1

It will be credited towards your closing costs.

Answer 2

chatsplas is correct.

The money gets put into an account help by a third party.  If you back out of the deal, you loose the money.  If you are denied, then you should get the money back.  This is a part of the down payment, and cannot be used for upfront costs such as appraisals, inspections, taxes or insurance.  It will be deducted at the end from the down payment.

At the time of closing, the settlement agreement will reflect the earnest deposit, and the money is taken out at that time. The buyer does not pay the real estate agent and the money will not go to the agent at all.  The seller has to pay them.

Answer 3

It is credited as money you paid and held by realtors, usually in an interest bearing account for the mutual benefit of buyer and seller.  The closing statement gives you credit for the earnest money payment in addition to your mortgage and other amounts paid for/by you.

Answer 4

YES TRUE! IT SHOULD GET ADJUSTED IN YOUR FINAL COSTS!

Answer 5

.   The deposit forms the first part of your down payment and closing costs.  It is all bundled.  If your down payment is $10,000 and your first months mortgage payment is $800,   your $2,000 earnest deposit will need $8,800 more for you to close.   No one cares if it goes to the mortgage payment (a closing cost) or the down payment.  It just gets spent.

Answer 6

It goes toward the total costs, closing or down payment.

If you back out of the sale it goes to the seller.