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End of Due Diligence

End of Due Diligence

The buyer enters into an agreement with an escrow company, known as the Escrow Agreement, which is a standardized agreement. The buyer then funds the Earnest Money Deposit (EMD) as specified in the offer document. The EMD is the full amount of the deposit, minus the Initial Deposit, for example, if the EMD is $50,000 and the Initial Deposit was $5,000, the balance due is $45,000 (unless stated otherwise in the offer document). Additionally, the buyer also deposits a PRE-Closing Costs Fee, which ranges from $3,000 to $6,000 USD, and in some cases up to 50% of the total cost. This fee will be applied to the closing costs that are due at the closing of the property and will offset the costs of pre-closing permits and requirements. If the buyer fails to make the EMD, the broker will inform the real estate agent, escrow agent, buyer and seller and the buyer will have 5 days to “cure” (deposit) the funds. If the deposit is not received within the five days and no extensions have been negotiated, the transaction will be canceled with no further responsibility to the buyer, or the seller and the Initial Deposit will be returned to the buyer by the Escrow Agent.

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