Many sellers and purchasers of Colorado properties are likely well acquainted with earnest money and its purpose in a residential real estate transaction.
That is not universally true, though. In fact, the concept might reasonably be foreign to some, with the function of earnest money and the role it plays in the property-buying sphere not being clear.
A quick definition of earnest money might simply term it a good-faith deposit by a prospective buyer that underscores a sincere interest in a property for sale and the desire to proceed with a transaction. It should not be confused with a down payment, given that earnest money is returnable to a would-be buyer in some cases.
Although the amount to be paid can be precisely specified, earnest money deposits are often a bit variable concerning their percentage of a property’s stated sales price. Every market is different. A so-called “seller’s market” might dictate that a buyer be relatively aggressive with a deposit amount to ensure due consideration. Conversely, a buyer’s market might induce a seller to accept a comparatively lower offering.
Seller-buyer conflict can occur regarding the disposition of earnest money in the wake of a collapsed transaction. It is commonly the case when a dispute does arise that a seller points to some alleged act of bad faith by the buyer, or vice versa. The seller insists on keeping the money; the buyer demands it back.
How such a scenario is ultimately resolved will depend on various factors. What do relevant documents and contracts executed by the parties state? What did the seller or buyer actually do?
Colorado real estate disputes run a wide gamut of possibilities, including conflict between sellers and buyers concerning earnest money. A proven Denver real estate attorney can provide sound counsel and, when necessary, diligent legal representation concerning any realty-linked challenges that might arise.