Austin Home Buyer Advice from LUXE Property Group
When you are buying a home in Austin, you have to put down “earnest money” when you have an accepted contract on a property. Once the earnest money is deposited (usually in an escrow or trust account), many home buyers want to know if they can get their earnest money back if something goes wrong during the transaction. Here are a few simple tips that you and your REALTOR can use to make sure you don’t put your earnest money in jeopardy.
5 Ways You Can Get Your Earnest Money Back
(1) APPRAISAL ISSUES – If the home doesn’t appraise for the price you negotiated, you would be able to get your earnest money back if sales contract has an “Appraisal Contingency.” Most home buyers don’t want to back out of the contract though, so if the home appraises for $10,000 less (for example) the seller can either lower the price or both parties can reach other agreement to split the difference. If you can’t reach an agreement with the seller, you can terminate the contract and get your money back.
(2) MAJOR HOME DEFECTS DISCOVERED – The home may look like your dream home, but sadly, the home inspection could reveal major problems, ranging from issues with mold, radon, structural issues or even a roof that’s at the end of it’s useful life. If the seller doesn’t agree to repair the items prior to closing or don’t reduce the purchase price, you could terminate the contract and get your earnest money back.
(3) FINANCING ISSUES – If you have a financing contingency period in your sales contract and you are not approved for the loan, you can get your earnest money back. Just make sure that your lender send the denial letter before the end of the contingency period. Your REALTOR can help you to make sure everything happens within the timelines in the sales contract.
(4) SELLER BACKS OUT – It’s very RARE, but should it happen, you will get your earnest money back.
(5) YOUR HOME HASN’T SOLD – Many Austin home buyers can’t afford a new home until they sell their current one. If you write an offer on a new home your real estate agent can add a clause that the offer is contingent on your home selling. You’ll be able to get your earnest money back if your current home doesn’t sell soon enough.
Important items to note:
If you move forward and purchase the home, your earnest money is typically applied to your down payment. The contingency periods are negotiable with the seller, so work with your agent and lender to make sure they are protecting your earnest money!
The top-notch Austin real estate agents with the LUXE Property Group at eXp Realty are always looking out for their home buyer clients best interests. If you have questions about the home buying process or are ready to start your search, call us at 512-766-LUXE.