Earnest Money Deposits

Timeframe

The West Michigan Regional Purchase Agreement provides 72 hours to obtain the Earnest Money Deposit (EMD). When the funds are in hand, the Michigan Occupational Code takes over and provides the broker 2 banking days to deposit the funds.

Disputes

GRAR does not have jurisdiction in earnest money disputes since those are disputes between buyers and sellers. Below are resources to resolve those matters:    

First and foremost, consult your broker.

The following resources are also available:

• The Earnest Money Deposit (EMD) Paragraph within the West Michigan Regional Purchase Agreement sets forth the procedures for disbursement of the earnest money deposit. The Earnest Money Disbursement Notification Form (sometimes referred to as a 15-day letter) will assist with that process. This document explains the process for placing funds with an interpleader of the court.
• As an alternative to interpleading, the parties might consider reaching out to the National Center for Dispute Settlement at 800-936-4303. This organization provides attorneys to mediate and/or arbitrate disputes between buyers and sellers. However, if there is concern that the agent or broker mishandled the EMD, then a formal complaint may be filed with GRAR’s Professional Standards Committee.  

FAQ

My buyer wants to offer a non-refundable earnest money deposit to make his offer more attractive to the seller. Does GRAR offer an addendum for this purpose?

There isn’t a specific form for this purpose, but the following language could be inserted into the purchase agreement: “If the sale is not closed as provided in the Purchase Agreement, for any reason other than the fault of the Seller, Buyer and Seller agree that the Earnest Money Deposit is non-refundable to the Buyer.”