THE PATHWAY TO BUYING
WHAT CAN CAUSE THE TRANSACTION TO FAIL
- If the buyer and seller cannot agree on terms.
- Buyer fails to deposit earnest money
- Buyer’s failure to qualify for a mortgage (e.g., sudden loss of job)
- Buyer asks for addiional concessions in the physical inspection and the seller and buyer cannot come to a mutual agreement.
- The home doesn’t “appraise” at the offer price, and there isn’t sufficient reconciliation between the buyer and seller.
- The buyer decides to walk away from the deal.
- Buyer can walk away from the deal at any time. They may forfeit their earnest money if they don’t meet certain conditions.
- Once home is under contract, seller cannot “walk away” unless there’s a concession requested by the buyer and they don’t come to terms.
When does a buyer forfeit earnest money? (click for answer)
A buyer can almost always get their earnest money back during the Seller’s Disclosure review period and Physical Inspection period. After that, typically, they can only get their earnest money back if they unexpectedly cannot qualify for their mortgage (a job loss, for instance).
Who does the money go to if the buyer’s earnest money is forfeited? (click for answer)
Typically, 100% to the seller.