When you’re buying land in Lake City or elsewhere in North Florida, you’ll usually have to put down an earnest money deposit to show the seller you’re a serious buyer – but there are a few cases in which you can lose your earnest money deposit.
Here’s what you need to know.
When Can You Lose Your Earnest Money Deposit When You’re Buying Land?
Typically, you’ll make an earnest money deposit when you put in a purchase offer on a piece of land. The seller can then take the property off the market with the confidence that you’ll actually buy it. Your earnest money deposit will probably total between 2 and 5 percent of the land’s total purchase price.
In many cases, if the transaction falls through, you’ll get your earnest money deposit back – but there are some cases in which you’ll have to forfeit it to the seller:
- When you waive contingencies in your contract
- When you get cold feet
Let’s take a closer look at both of these cases.
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#1. Losing Your Earnest Money Deposit When You Waive Contingencies in Your Contract
Most real estate purchase contracts include contingencies. Contingencies are clauses in your contract that describe events that need to happen for the transaction to go through, like financing and inspections. If those things don’t happen, you can get out of the contract with your earnest money deposit – but if you waive your contingencies (meaning you say you don’t need an “out” in the event that these things don’t happen), you can’t get out of the deal without forfeiting your earnest money deposit to the seller.
#2. Getting Cold Feet and Losing Your Earnest Money Deposit
If you back out of a deal for any reason other than one that’s outlined in your purchase contract, you’ll lose your earnest money deposit. That includes getting “cold feet” and deciding the property just isn’t right for you when you’ve already made an offer (and the seller has already accepted your offer.
Are You Buying a Home or Land for Sale in Lake City?
If you’re moving to Lake City, we can help you find the perfect place to live. Call us at 386-243-0124 to tell us what you want from your home and we will begin searching right away.
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