Follow-up to above question regarding earnest money and contract termination:

1 minuteread

1. Earnest money is not “consideration” for the TREC contracts. A real estate contract is an enforceable contract if it is in writing, shows a meeting of the minds on all terms and conditions, and is signed by all parties to the contract. The promise of the seller to sell and of the buyer to buy is sufficient consideration to support the making of a contract. The failure of a party to perform an obligation required under the terms of the contract, including a failure of a buyer to timely deposit earnest money, is a default by that party authorizing the other party to exercise any of the default remedies described in paragraph 15 of the TREC contracts. 2. The formal notification by a seller in writing to a buyer would be prudent in order to eliminate an argument by the buyer that by conduct or comment the seller might be waiving his right to insist on timely performance by the buyer of his obligation to deposit the earnest money.

Source: TAR

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