If you’re buying a home, you may be asked for an “earnest deposit” or “good faith deposit”. Simply put: if you close you will get it back. But if you break the terms of the contract, you put it at risk. Most sellers aren’t going to sue for breaking the contract, but they would look to the earnest deposit as compensation. The larger the deposit the more at risk the buyer is.

I was the listing agent for a deal and the buyer had a home inspection that made them decide that they didn’t want to purchase the home because of issues they found at that point. The problems were not insignificant so they were able to terminate the deal. My seller was bent out of shape by the experience so we simply said, “ok, you don’t have to purchase the home but you can’t have the earnest back”. It was a great tactic to put pressure on the buyer to split the payment.

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