Is earnest money required to make a contract effective? Posted on August 7, 2013 by Texas Association of REALTORS® I sent my client’s offer to the listing agent who said he wouldn’t present the offer until I sent an earnest-money check. He also told me that the earnest money had to be included with the offer for it to become a binding contract, if the seller wanted to accept the offer. Is that correct? No. Earnest money is not necessary to make an otherwise accepted offer into a valid contract. Earnest money is a buyer-performance item that is 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. A seller could instruct a listing agent to present only offers that include an earnest-money check. However, a listing agent who decided on his own to not present an offer without the earnest money check might be violating his duty to present all offers as quickly as possible, as stated in Standard of Practice 1-6 of the Code of Ethics. Visit TexasRealtors
Posted on: Fri, 09 Aug 2013 18:25:28 +0000
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