How earnest money makes your offer stand out
When multiple offers hit the table, earnest money is one of the fastest ways to separate yours from the rest. I explain how to use it strategically — not just as a deposit, but as a negotiation tool that tells a seller you're serious.
Transcript
Hey, what's up? This is Tim Clarke, your trusted real estate advisor in the Raleigh-Durham Triangle market, and this is your free helpful tip and trick from Tim. Buyers, the earnest money provided is very important to a seller because it is the seller's only compensation for what we call liquidated damages. In layman's terms, a buyer can't complete their obligation to purchase.
Now, buyers are entitled to a full refund of their earnest money if they terminate the contract before the end of the due diligence deadline. Once the due diligence period has ended, then the earnest money is the seller's only protection against a default by the buyer. The buyer has no other further liability for damages on the account of the buyer's breach of the contract. Now, the earnest money is a credit against the purchase price at settlement.
The due diligence fee can also be considered in this process and is also discussed later, but the realistic financial capacity of the buyer, as well as the occurrence of a buyer's market and the seller's market, will also have significant impact on the amount of earnest money and/or due diligence that the sellers can demand or expect. This is Tim Clarke, and this is your free helpful tip.
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