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Sample Earnest Money Agreement

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When entering into a real estate transaction, one of the first steps is typically to provide earnest money as a show of good faith. An earnest money agreement is a document that outlines the terms of this deposit and helps to protect both the buyer and seller.

Here is a sample earnest money agreement:

1. Parties: This section outlines the names of the buyer and seller, as well as any real estate agents involved in the transaction.

2. Property: Here, the address of the property being purchased is listed, along with any legal description or other identifying information.

3. Purchase price: The agreed-upon purchase price for the property is listed in this section.

4. Earnest money deposit: The amount of money to be deposited as earnest money is listed here. This amount is typically a percentage of the purchase price, and it is held in escrow until the sale is finalized.

5. Escrow agent: The name of the escrow agent who will hold the earnest money deposit is listed here. This agent is responsible for ensuring that the funds are held securely and disbursed appropriately.

6. Conditions of release: This section outlines the circumstances under which the earnest money deposit may be released. For example, if the seller fails to meet certain obligations outlined in the purchase agreement, the buyer may be entitled to have their earnest money returned.

7. Dispute resolution: In the event of a dispute between the buyer and seller, this section outlines the process for resolving the dispute. This may include mediation, arbitration, or litigation.

8. Contingencies: Any contingencies that must be met before the sale can be finalized are listed here. This may include obtaining financing or completing a home inspection.

9. Closing date: The agreed-upon closing date is listed in this section. This is the date when the sale will be finalized and ownership of the property will transfer from the seller to the buyer.

10. Signatures: Finally, both parties will sign the earnest money agreement to indicate their acceptance of its terms.

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