is earnest money necessary? - Posted by Melanie

import · July 10, 2003, 6:00am

Posted by River City on July 11, 2003 at 08:12:47:

What makes the contract legal are the signatures not the earnest money. The earnest money indicates your earnest intent to purchase the property. It also makes you think twice before backing out.

import · July 10, 2003, 6:00am

Posted by Melanie on July 10, 2003 at 06:00:55:

Newbie question here-is earnest money necessary in order to make a purchase contract a legal document? I am the buyer in this situation.
thanks

import · July 11, 2003, 5:03pm

Re: No - Posted by Ed Copp (OH)

Posted by Ed Copp (OH) on July 11, 2003 at 17:03:18:

Earnest money is not necessary. This is good faith money, and if all the parties concerned have faith in each other then no earnest money is necessary.

River city is close. There is a consideration required to cause the offer to become a contract. The promise to purchase, in itself is a consideration. Thus if I have complete faith in you it would not be necessary for you to have earnest money.

Now as a real estate broker I like to see a sufficient amount of earnest money to cover my commission, unless of course I have perfect faith in all the parties concerned. This is rare.