What is (EMD Real Estate) Ernest Money Deposit?

This money has to be deposited by the buyer to make sure that every transaction in the real estate deal real estate attorney in Loudoun county is done in compliance with the contract. There is no fix amount of EMD and it depends on the property being bought, generally, the EMD is negotiated between the buyer and the seller of a roperty, when the contract is being signed; your real estate agent guides you how much amount should you deposit for EMD. Once you have negotiated the amount of EMD, it is to be deposited in an escrow account held by an escrow agent. Real estate settlement agent or your real estate broker can act as your escrow agent.

EMD is one of the most important aspects of real estate dealings and it would be best considered to get the help of your real estate agent in this matter. As a seller the EMD ensures that the buyer won’t forfeit from the deal at the last instant. In some instances, what happens is that sellers are scammed by fraudulent personal posing as a buyer of a property. They would take out as much information as possible from sellers and at the last instance; they would walk away from the deal. Then they would use the information they have gathered during the deal to employ identity theft tactics and scam the official owner of the property. EMD is considered as one of the strongest shields against such frauds. From the point of view of the buyer, the deposited money will confirm for the seller that your intention is really to purchase the property and not scam the seller.

Escrow Agent For

EMD Real Estate

The main responsibility of an escrow agent with regards to EMD is to hold the amount until the deal’s closing. At the time of the closing the EMD amount is released for the buyer for Closing Disclosure. In case, when the deal does not reach the closing due to any dispute between the buyer and the seller, the escrow agent will hold the EMD until unless a Release of Deposit is carried out by both of the parties. The escrow agent will then work on send the EMD to a specific party or specific division of EMD to both of the parties. The escrow agent is bounded to not release the EMD until the Release of Deposit is signed by both of the parties.

There can also be a scenario where both of the parties cannot come to a single point of agreement on the disbursement of the EMD, in that situation; the escrow agent has an option where, they can pay the amount into the court and when such situation happens, both parties have to consult the court of law to sign the petition to disburse the money. In this situation, both parties have to pay for the court’s fees for the legal process. The escrow agent also holds the right to deduct any fees incurred to them if the EMD has to be deposited into the court causing a reduction in the overall amount that was to be disbursed to both of the parties.

So by keeping all of this in mind, it is best to settle the affairs outside of the court under an escrow agent rather than to disagree with other party and follow a process full of hassle

In Virginia law the details for the EMD amount, terms andthe escrow agent’s name will be mentioned in the third paragraph of thecontract. It would be best to consult with a professional such as your real estate agent or us at Fox & Moghul Law to make this processeasy for you or else you can lose a decent amount of money. The summary of thecontract is that the EMD has to be credited to the buyer at the time of the closing of the deal. However, there are no guidelines on how to disburse themoney once the transactions face a dispute between both parties.