Who holds earnest deposit on a home we're buying in Olathe, Kansas?

Quick Question: I'm about to make an offer on a home in Olathe, Kansas. My real estate agent suggested that I put down a $2,000 earnest deposit. Why would I pay $2,000 more down on the Olathe home I want to make an offer on and the offer is not accepted? That would be a waste of money.


Cindy O. from Kansas City


Answer: First, the earnest deposit is held in an escrow account until closing. Typically in Olathe, KS. the deposit is held in an escrow account at the title company or at the broker's escrow account. Escrow accounts are highly monitored.


The earnest deposit offsets the money a home buyer will need for closing. It is NOT additional money needed. For an example if the closing cost, pre-paids and down payment comes to $10,000 and the earnest deposit is $2,000, then only $8,000 will be needed at closing.


If the offer does not get accepted, the earnest deposit will not be deposited and the check will be sent back to the buyer.


If the offer is accepted, but does not close due to a contingency that had been in the contract, then the earnest deposit will be sent back to the buyer unless it was a non-refundable earnest deposit. 


Hope this helps. If you have any other questions, feel free to contact the Dowell Taggart Team.


RE/MAX sells more homes than any other real estate company.
For a reason...should we talk?

Blog post written by the Dowell Taggart Team of RE/MAX Premier Realty 

Comments are appreciated! Go ahead and add your 2 cents . . .
We have 3 easy steps to find you the perfect home . Click here to get started, today!

Short sales, foreclosures, luxury homes, investor homes, first time home buyer homes, land, investment properties and move up buyers.

Gardner, Olathe, Overland Park, Leawood, Lenexa, Shawnee, Mission, Merriam, Prairie Village, Basehor, Tonganoxie, Lansing, Leavenworth, Spring Hill, Eudora, De Soto, Edgerton, Platte City, Smithville, Gladstone, Liberty, Riverside, Independence, Lee's Summit, Pleasant Hill, Raymore, Belton, Grandview, Raytown, Waldo and the surrounding Kansas City communities.