By Jennifer Srock

Any seller wants to know you’re serious about purchasing their home. A buyer’s earnest money shows sincere conviction to the transaction. Specify how much earnest money is to be deposited and how it is to be handled at close of escrow.

 

Honesty is just as important as being earnest. The form of earnest money and where it will be deposited should be addressed and outlined with how the total purchase price is to be paid. Is it by cash only? What type of loan? How much is the loan amount? How much is the down payment? Paint a clear picture to avoid any doubt and build trust with the seller.

 

Earnest money always belongs to the buyer to be used as the buyer wishes. Only if a buyer breaches their contract will their earnest money be in jeopardy.

The seller agrees to deliver possession and keys to the buyer at Close of Escrow (COE) unless another date is indicated. Both buyer and seller should be aware of the liabilities that transfer when doing a pre-possession which is when the buyer takes possession prior to escrow closing or post-possession which is when the seller is still in possession of the home after close of escrow.

You should not act upon a pre-possession or post-possession agreement without seeking independent tax, insurance, and legal counsel. If you desire legal, tax or other professional advice, please contact your attorney, tax adviser or other professional consultant. A realtor is not license to advise on this matter.

 

It is a common misconception that after your signing you are handed your keys. Although it can happen in some cases, don’t expect to get your keys the same day you sign your closing documents. You will not only need to sign your closing documents but escrow will need to be closed before you get the keys to your new home.

Close of Escrow (‘COE”) happens after the deed is recorded at the county recorder’s office.

Both buyer and seller agree to comply with all terms and conditions, execute and

deliver to escrow company all closing documents, and take all other necessary

actions in sufficient time to allow COE to occur on the COE Date. All parties are funded and the deed is recorded. Only then the property is officially handed over to the buyer(s).