Realtors, are your clients confused about earnest money? In this episode, Sherri Sellers breaks it down into simple, practical steps so you can guide your buyers and sellers with confidence. Learn how earnest money impacts a deal, why it’s crucial for both parties, and what happens once it’s handed over.

What You’ll Learn in This Episode:

• What is Earnest Money? A buyer’s deposit showing commitment to a home purchase.
• Why Does It Matter? Protects both buyers and sellers during a transaction.
• What Happens to It? Placed in escrow until closing—or refunded or forfeited based on the contract.
• Pro Tips for Realtors: How to keep clients informed, avoid wiring scams, and ensure smooth transactions.

Key Takeaways:

• Earnest money is typically one to three percent of the purchase price and signals a serious buyer.
• It can be a deciding factor in competitive markets, sometimes making the difference in a bidding war.
• Escrow serves as a secure holding account for the funds until closing or contract termination.
• Common pitfalls include missed deadlines, wiring fraud, and misunderstandings about refund policies.
• As a realtor, you play a vital role in educating clients, keeping deals on track, and ensuring a smooth transaction.

Real-Life Stories & Insights:

• A buyer offered five percent earnest money in a bidding war and won the deal, even though they did not have the highest offer.
• A buyer accidentally wired their earnest money to the wrong account. Quick action saved the deal, but it was a powerful reminder to always double-check wiring instructions.

• Explain the process clearly to clients so they understand how earnest money works.
• Emphasize the importance of deadlines since missing them can put the deal at risk.
• Review contract terms with buyers so they know when earnest money is refundable and when it is not.
• Stress the importance of security and verifying wiring instructions to prevent fraud.

If you found this episode helpful, share it with your team.
Have questions or topics you’d like Sherri to cover? Let her know.

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