When you have your house on the market you welcome an offer. You get one with the typical 1% earnest money deposit and move on through the due diligence period towards closing. Most of the time it’s a happy ending. But what happens if the buyer refuses to close after the due diligence period and all contingencies have been met?
In a recent change, the Georgia Association of Realtors contract now specifies that the seller will only receive the earnest money deposit as compensation for a buyer who fails to close. Sellers can add a special stipulation giving them the option to pursue legal action.
Practically speaking, most sellers won’t want to go to the effort and expense of legal action.
What does this mean for sellers? Carefully consider the amount of earnest money you the buyer is offering with the knowledge that if closing doesn’t happen it will be all you have.
As I do with any offer received on my listings, I evaluate the buyer’s ability and intention to close by looking at the amount of earnest money, loan particulars, motivation, and other aspects which I discuss with his/her agent. All terms in an offer can be negotiated by both parties. Make sure you take a second look at the amount of earnest money the buyer is willing to commit.