Is it common to release earnest money early on a new construction home?
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Is it common to release earnest money early on a new construction home?
I am purchasing a house that is under construction, I did not contract the build, just found it prior. I was offered to make upgrades (flooring, tile, appliances and other non structural changes. they asked for extra earnest money for the changes (fine). now we have accepted offer. a week later they send a release of earnest money form. I don’t want to sign it, I feel keeping the money in the title company protects me in case of bankruptcy of the builder or any other issue that may arise.
Asked on February 15, 2012 under Real Estate Law, Oregon
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
It is not common to release one's earnest money to purchase real estate before the close of escrow date when the buyer intends to make the purchase. The release of the earnest money typically happens when the buyer has decided to not close escrow and is willing to waive the money placed in escrow as a condition of no further recourse for the failed sale.
I would refuse to release the earnest money for this new construction to the seller. It sounds that the seller has monetary issues and needs the money.
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