Definition
A document signed by buyer and seller authorizing the escrow holder to release your earnest money deposit. Earnest money is released to the seller at closing or returned to you if contingencies allow.
Not sure where this fits?
Answer a few questions and we’ll open the path that fits, at the right step.
Find my pathAbout this term
At closing, earnest money is typically released to the seller to be credited against the purchase price. If the contract terminates during the option period, earnest money is released to the buyer. If the contract terminates after the option period due to seller's failure to cure title issues, earnest money is released to the buyer. If the buyer breaches without valid contingency protection, earnest money may be released to the seller.
Pro Tip
Ensure you understand your contingency rights. Without proper contingency language, your earnest money may be forfeited.
Example
A buyer terminates the contract during the option period due to inspection issues; both parties sign a release authorizing the escrow company to return the buyer's earnest money.