EMD is short for Earnest Money Deposit. An EMD is money that you put down as a deposit when making an offer to purchase on a piece of property.
It is legal to make an offer without an EMD, however, the amount of the deposit shows the seller how serious you are about purchasing the property.
For instance, if the asking price of the property is $75,000 and you decide to offer $75,000 with a $0 EMD, the chances of your offer being taken seriously are low.
On the other hand, if you offer $70,000 with a $5,000 EMD for the same $75,000 property, your offer will be taken seriously.
It’s important to know your EMD will go towards your final costs, and if the transaction does not close (and it’s not your fault), you’re entitled to your EMD back. It’s also important to understand what your purchase agreement says specifically about YOUR EMD.
All EMD clauses are not the same, so make sure that you read and understand the verbiage so that you’ll know what to expect.
If you have any questions about EMD’s or any other part of a real estate transaction, please complete the form. One of our agents will be happy to assist you!
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