Potential buyers can do several things to protect their serious deposits. Serious money is held by a trust agent that the buyer and seller have accepted. In many cases, it is the seller`s lawyer, the real estate agent or a representative of the securities company, but it may also be an unrelated third party. In the event of an infringement, the agent hands over the money to the seller. In the event of a dispute over the existence of an offence, the agent may hold the money until the dispute is resolved or the trust agent may file an action before a competent court to obtain a judgment on those who are entitled to the trust funds.  It would certainly be unwise for the agent to distribute funds to one party in the event of a dispute so that the other party does not sue the agent for the illicit distribution of these funds. Earnest Money is usually paid by certified cheque, personal cheque or transfer to a trust or trust account managed by a real estate agency, law firm or property company. Funds are held in the account until closing if they are applied to the buyer`s down payment and down payment fees. It is important to note that trust accounts, like any other bank account, can earn interest. If serious funds in the receiver account earn interest in excess of $600, the buyer must complete the W-9 tax form with the IRS to obtain the interest. While buyers and sellers can negotiate serious money deposit, it often ranges between 1% and 2% of the purchase price of the home, depending on the market.
In hot real estate markets, the deposit could be between 5% and 10% of the sale price of a property. Proof of serious money deposit is given to a buyer of real estate after entering into a sales contract with a seller. The deposit voucher is given to the buyer as soon as the funds that the parties have included in the contract are received. If the buyer does not comply with the purchase of the property, it is returned to the seller. If the seller tries to cancel the contract, the buyer can take legal action against a defined benefit that can legally impose a sale plus damages. Earnest money is also known as a binder or money tokens. It essentially confirms a contract and, once the serious money has been paid, both parties are required to pursue the verbal agreement.