Earnest Money Deposit on Option Contract

[Tiara Murray]

Would I have to submit an earnest money deposit on an option to buy contract? Does it work like a Purchase agreement?

[Demos Loizides]

Tiara,

You mentioned Option to Buy contracts and dealing with Realtors in your 2 threads. If you're thinking of using Option to Buy contracts with Realtors, they probably won't accept them. They'll want you to use their tree killing, multi-page contracts.

On the topic of earnest money deposits and non-bank sellers, where Realtors aren't part of the equation, you really don't have to put down anything. Earnest money deposits can be called consideration.

Contracts need three things: 1) an offer; 2) an acceptance; and 3) consideration. Consideration basically means you're not getting something for nothing. A lot of people think consideration means giving money. It can be anything of value.

My Option to Purchase agreement says I will be marketing their property to find an end buyer. That's my consideration. I'm putting in time and effort to take pictures and videos and doing marketing in order to find an end buyer so they can sell their house.

I know a lot of you will probably disagree with me, but if I did give them any money, it would probably be the proverbial $10 most everyone else uses.

Demos