The last thing a homebuyer wants is to emotionally commit to purchasing a home and then lose it. Similarly, no seller wants to select a buyer, only to see the home sale fall apart. Everybody made plans. Suddenly, both parties have to start over. When the sale falls through, both buyer and seller can feel an emotional attachment to the initial earnest money deposit. That’s when earnest money disputes arise.
Sales fall through for unexpected reasons. Sometimes it’s an unforseen life event, cold feet or a sudden change in finances. Earnest money disputes seek to determine whether the buyer or the seller deserves to retain the original monetary deposit. If you’re a potential buyer or seller, it’s a good idea to understand a few concepts about earnest money to help reduce the possibility of a bitter trip to the courtroom.