Earnest Money Deposit Nevada On Private Real Property Sale

An earnest money deposit is money is put up by a potential buyer of real estate to show that it is seriously interested in making the purchase. The money is usually paid within 24-48 hours after the offer is accepted, and is held by a third party or escrow company until the deal is completed. See full list on study.com.

  1. Earnest Money Deposit Nevada On Private Real Property Sales
  2. Earnest Money Deposit Nevada On Private Real Property Sale Income Tax

Re: Return of Earnest Money Deposit for Home Purchase

You asked about an earnest money deposit.

When parties arrive at an agreement to a contract and do anything to prove up that contract then the agreement is binding and enforceable.

In the case of real property, the sale of the property actually takes place when an offer is accepted and there is ANY signed writing to demonstrate the agreement. This can, and often does, include a signature on a deposit check. In your case you signed an agreement of sale.

This is the key, when you signed that agreement and the other side accepted it you had just purchased the property. The actual transfer may take place at some later time, but the sale occurs when the agreement is reached.

Unless the agreement had a condition which allowed for the purchasers to withdraw if they failed to obtain financing then the seller could have forced the purchaser to go through with the transaction.

Deposits are there for a reason. They represent an earnest intent of the purchaser to complete the transaction. If there was no deposit what was to prevent you from putting out multiple contracts on houses and closing only on one?

The deposit can be thought of as liquidated damages. In many cases, the seller actually may see more damages than are covered by the deposit when a purchaser fails to complete the transaction. In that case the seller can actually go after the party with a claim for the difference betweem the bargain that was arrived at and the final cost of selling the home.

Look at your contract and see if it was conditional on your being able to obtain financing, or any other cause. Unless the agreement provides for the return of the deposit then you have no right to get the deposit back.

This is one reason that buyers should try to put the lowest down-payment amount of money possible on a property.

Regards,

Rogers

Earnest Money Deposit Nevada On Private Real Property Sales

All that you need to know about Earnest Money Deposit (EMD) in Las Vegas, Nevada

When a Las Vegas real estate deal fails, there is usually a dispute between buyer and seller as to who is entitled to the Earnest money Deposit or EMD. So we thought that it would be beneficial to do a post about EMD in Las Vegas home for sale or condo deals.

Earnest Money Deposit Nevada On Private Real Property Sale

Earnest Money Deposit (EMD) is the deposit paid by a prospective Buyer as evidence of their “good-will” to complete the real estate transaction; the Buyer is promising to be diligent in their efforts to fulfill the terms of the Residential Purchase Agreement (“RPA”). Additionally, if the Buyer and Seller agree, the earnest money deposit may also serve as a source of payment of “liquidated damages” should the Buyer default, that is, fail to perform in accordance with the terms of the “RPA”.

Although EMD is not required for the creation of a valid and binding “RPA” it is rare that an “RPA” does not include an “EMD”. The reason for this is that an “EMD” demonstrates to the Seller that the Buyer is serious about his/her offer. Although the amount of the earnest money deposit varies, it is usually enough to motivate the Buyer to take whatever steps that are necessary to perform as outlined in the “RPA” in the time-frame specified.

The general rule with respect to “EMD” is that the Buyer is entitled to a return of the “EMD” if the transaction does not close through no fault of the Buyer. Conversely, the Seller is entitled to the “EMD” if the Buyer breaches the “RPA”. However, when a real estate transaction fails, both the Buyer and Seller may claim a right to the “EMD”.

  • 1. The “EMD” may be deposited with an escrow/title company handling the transaction. Escrow/Title companies are a neutral third party that follows the Buyer and Seller joint written instructions.
  • 2. The Residential Purchase Agreement contains a provision that buyer and seller should be familiar with since it will dictate what happens in the event the Buyer or Seller defaults.
  • 3. If the transaction is canceled, the right to the “EMD” will depend on whether there was a default under the terms of the contract, and if so, who is the party in default.
  • 4. The real estate brokers and their agents have no authority over the escrow/title company. Thus, they have no authority to direct the payment of the “EMD” to either the Buyer or Seller.
  • 5. Neither the escrow/title company nor the borrowers or agents lack the authority to decide who defaulted under the terms of the purchase agreement. Only a court of law can make that decision.
  • 6. If a dispute arises regarding who is entitled to the “EMD”, the escrow/title company will usually hold the “EMD” until the Buyer and Seller reach a mutual agreement or until they are presented with a court order directing payment.
Earnest
  • 7. If the court concludes one party is entitled to the “EMD”, it will enter a judgment in their favor. The prevailing party can present that judgment to the escrow/title company, which will honor it.

Earnest Money Deposit Nevada On Private Real Property Sale Income Tax

  • 8. Real estate brokers, their agents, nor the escrow agents can offer legal advice. If any party has questions regarding their legal rights, they should seek the advice of an attorney.