Does a buyer have to submit his earnest money with the offer?

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A woman in a orange shirt signing a check.

03/04/2016 | Author: Editorial Staff

I submitted an offer to a listing agent on behalf of my client, who offered to pay $1,500 in earnest money. This listing agent reviewed the offer but said he wouldn’t present it until he received the check. He said if the seller accepts my client’s offer, then the earnest money is necessary for the offer to become a binding contract. Is this true?

No. Earnest money is not necessary to make an otherwise accepted offer into a valid contract. Earnest money is a buyer-performance item required to be deposited after a contract is fully executed. A contract could become effective even if no earnest money is required in the agreement.

While a seller could instruct an agent to only present offers that include an earnest-money check, an agent who decided himself that he will not present an offer without an earnest-money check may be violating the Code of Ethics’ instruction to present all offers as quickly as possible.

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Categories: Forms, Legal, Buyers, Sellers
Tags: earnest money, forms, contracts, legal, legal faq, buyers, sellers

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Legal disclaimer

The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.

While the Texas Association of REALTORS® has used reasonable efforts in collecting and preparing materials included here, due to the rapidly changing nature of the real estate marketplace and the law, and our reliance on information provided by outside sources, the Texas Association of REALTORS® makes no representation, warranty, or guarantee of the accuracy or reliability of any information provided here or elsewhere on texasrealestate.com. Any legal or other information found here, on texasrealestate.com, or at other sites to which we link, should be verified before it is relied upon.

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