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July 17, 2007


Bonnie Erickson

Aaron, You're right about small earnest money. I tell my buyers to plan on 1% for their earnest money, but that is not always possible. Even though the purchase agreement says both parties will sign a cancellation, legal action sometimes has to be taken in order to release the earnest money. If the seller doesn't want to hold their property up from sale because of legal action, then they often will sign.

Aaron Dickinson

Unfortunately many buyers are putting up so little earnest money that it seems almost a token anyways, instead of an "earnest" offer.

While our PA's do dictate the situations where buyers or sellers would be entitled to the earnest money, until both parties sign the Cancellation of Purchase Agreement, that money cannot be returned to either party. For those that choose to, this can in of itself become a bargaining tool, although I certainly have mixed feelings about it.

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