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I've got a deal with a FSBO and they've asked me for earnest money. I know I need to give it, but how do I know if I will get it back if the deal fails?
Answers for Buyers
Don't Give an Earnest Money Deposit Directly to a FSBO Seller!
It should go into
a trust account. Some FSBO sellers believe the money is theirs to use
as they please. They don't understand that it's a good faith deposit to
be applied to your expenses at closing. I've heard many stories about
sellers who spent the buyer's deposit prior to closing. The
transactions didn't take place for valid reasons (such as financing or
repair problems) and the buyers had to fight to retrieve their deposit.
Find an attorney who will hold the funds for you until closing day.
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