When you buy a home in Delaware, you typically have to make an earnest money deposit to demonstrate to the seller that you’re serious about the purchase. Earnest money is a good faith deposit that you make to show your intention to buy the property. However, if you fail to follow through on the purchase, you might lose your earnest money.
Here are some ways that you might lose your earnest money when buying a home in Delaware.
Failing to obtain financing
You might lose your earnest money deposit if you fail to obtain financing for the home purchase. When you make an offer on a home, it is usually contingent on you obtaining financing. If you’re unable to secure a loan, you might have to back out of the sale. However, if you do not meet the conditions of the financing contingency, you might forfeit your earnest money deposit.
Another way that you might lose your earnest money is by missing deadlines. When you sign a contract to buy a home, there are typically several deadlines that you must meet. For example, your bank might require that you obtain a home inspection or finalize financing by a specific date. If you miss these deadlines, you might be in breach of the contract, and the seller might have the right to keep your earnest money deposit.
To void losing your earnest deposit, it is essential to read and understand the terms of your contract carefully. By doing so, you can minimize the risk of losing your earnest money and successfully purchase your new home.