"Non-Refundable Earnest Money" Language

This is the correct language to use in special provisions when you would like additional earnest money to be non-refundable or "hard".

Buyer will pay sellers non-refundable independent consideration of $_______ within ____ days in exchange for Seller’s agreement to enter into the certain Amendment attached hereto. This fee will be credited to the Sales Price on behalf of the Buyers at closing. In the event that Buyers default and there is no closing on or before the Closing Date, the aforementioned independent consideration shall be paid to Sellers.

The Problem w/ Language Most Agents Use:

Many buyers fight for their earnest money when they don't close, no matter what the contract says. If you label the additional money paid in as "non-refundable earnest money", it is contractually gray. It's being labeled as earnest money, so has many contractual contingencies attached to it. Even if you were to release this EM to the sellers (rather than sitting at title), the buyer could demand it be returned since it's earnest money and has many contractual outs for the buyer.
Did this answer your question? Thanks for the feedback There was a problem submitting your feedback. Please try again later.

Still need help? Contact Us Contact Us