Question

Jared is a buyer in Minnesota who is working with an agent. He's made an offer on a property owned by Byron, who is also working with an agent. Byron accepted Jared's offer. Assuming there are no specific instructions in the purchase agreement, what happens to Jared's earnest money?

Answer 1

Jared's earnest money would typically be held in an escrow account, to show his intent to purchase the property. It will be credited towards his down payment or closing costs.

Step-by-step explanation:

In this situation, Jared's earnest money would typically be held in an escrow account.

The earnest money is a deposit made by the buyer to show their intent to purchase the property. It shows the seller that the buyer is serious about the transaction.

When both parties have agreed to the offer and signed the purchase agreement, the earnest money is typically held by a third party, often a title company or an attorney, in an escrow account. The earnest money will be credited toward the buyer's down payment or closing costs at the time of closing.