The earnest money deposit is an important part of the home buying process. The deposit of earnest money into an escrow account with a Title Company will reassure the seller yoursquo;re a committed buyer, and will later help fund your down payment. Without earnest money, you could make offers on many homes, essentially taking them off the market until you decided which one you liked best. Sellers will rarely accept offers without an earnest money deposit. The earnest money is a buyer-performance item required to be deposited after a contract is fully executed. Like most performance obligations in the contract, time is not ldquo;of the essencerdquo; but it is good practice to deposit earnest money as soon as possible after the contract is effective. Failure to deposit the earnest money in a timely manner could result in the buyer being in default. Therefore, the buyer has a reasonable amount of time after the contract is executed by all parties to deposit the earnest money but should not waste any time in doing so. ldquo;Reasonable timerdquo; depends upon the circumstances and could be decided in court if there were ever a dispute over it. On a side note, the contract could become effective even if no earnest money is required in the agreement but the acceptance of a contract with no earnest money is not a common practice advised by Real Estate Agents.
