Earnest Money Deposits What Every Homebuyer Should Know

1 Mar 2025 · 1 min

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In this segment, the presenter explains that an earnest money deposit (EMD) is typically credited toward the buyer’s down payment or closing costs if the home purchase closes successfully. The speaker then outlines the circumstances under which the EMD may be refunded or forfeited, emphasizing that these outcomes depend on the presence of contractual contingencies—such as financing, inspection, and appraisal contingencies—that protect the buyer. If a deal collapses for reasons covered by these contingencies, the buyer can recover the deposit; otherwise, the seller may retain it. The speaker also references a separate video that delves deeper into contingencies, encouraging viewers to consult that resource for more detail.

Chapters

As far as your earnest money deposit being credited toward the purchase, if everything goes smoothly and you close on the home, this earnest money deposit typically goes toward your down payment or your closing costs. Okay. Now, as it relates to refund or the forfeiture of your earnest money deposit, if something in the purchase process falls through due to issues covered by contingencies, like, you know, remember what contingencies are. And I've shot a separate video on contingencies, check it out in the YouTube card above. But you have contingencies like the offer is contingent upon securing financing. The offer is contingent upon satisfactory inspections. The offer is contingent upon appraisal.