Hello, Sheri Groom with Republic Title and I’m here with Wade Bogdan, Residential Counsel and we wanted to visit a little bit today about earnest money and the purpose of that with a contract. So can you help talk a little bit about that?
Yes. Traditionally earnest money was put in place so that people knew that you were going to try to purchase a property in earnest so basically you’re showing someone that you are serious about purchasing their property.
I like that so earnest and then earnest money. That’s great. So if there’s no earnest money given does that mean there’s not a valid contract?
So actually that’s a common misnomer. So currently now in common day, you do not need earnest money to have a proper contract. However, the contract does have a section for earnest money and actually most importantly now the contract was just changed to add a three day time limit for getting your earnest money in after execution of the contract which is pretty much the most important thing that’s going on with earnest money currently.
That’s good information because we would get asked that a lot. Like do we have to have it? Is it still a valid contract?