Earnest Money Deposit - EMD

An Earnest Money Deposit (EMD), sometimes also referred to as a Good Faith Deposit is a sum of money that you agree to put down on a property. The recommended sum to put down on a propery is 1% or more.

Example: Purchase Price $250,000    $250,000 x 1% = $2,500 EMD

The EMD must be submitted within 72 hours of Effective Date on the contract. The payment is then held in Escrow until the closing of the property where the EMD amount will be deducted from the closing costs that the buyer has to pay.

In most Purchase Agreements, the EMD is outlined in Section 23, see below: 

This EMD amount is only refundable back to the buyer in the following events: 

• The buyer decides to cancel the Purchase Agreement within the outlined inspection period (typically the first 10 days)
• The buyer's financing falls through due to unforseen circumstances
• The seller terminates the contract

EMD Payments: It is recommended that a personal check, cashiers check, money order or an electronic payment is submitted from the buyer. The following information should be provided for the EMD Payment: 

Pay to the Order of: (Title Agency)

Amount: (Amount outlined in the Purchase Agreement)

Memo: (Property Address) 

For more detailed information or questions on an EMD, please contact us.