Earnest money shows you’re serious
Typically when an offer to purchase a house is made, you, as the buyer, will also pay an “earnest money” deposit.  This deposit shows the seller that you’re serious about the offer to purchase the property.  Howver, if the property is in foreclosure, California laws (CC 1695) prohibit you from giving the seller (or his agent) any money until five (5) days after the Equity Purchase Contract is signed (or 8:00 am of the day of the trustee's sale).  Don't make this mistake!

The amount of earnest money deposit varies based on the type of property being purchased and local market conditions.  During the Foreclosure Workshop, we'll help you determine the appropriate amount to pay as an earnest money deposit if it is a "short sale."

The sales contract will dictate who holds the earnest money.  Usually the seller’s real estate agent will deposit the earnest money in a trust or escrow account until closing.   At closing, the earnest money is applied to the purchase price.

In the event the sale doesn’t close, the sales agreement generally spells out the conditions under which you would forfeit the earnest money.  Generally if the seller meets all the terms of the contract, the seller will keep the earnest money.  If the seller does not meet the terms of the contract, you, as the buyer, may receive a total or partial refund of the earnest money.  During the Foreclosure Workshop, we'll teach you how to use "Contingency Clauses" to assure your return of the earnest money deposit.

If you are interested in attending one of our free Foreclosure Workshops in your area, please click on the appropriate schedule and register.