What is EMD?

EMD is an acronym for ‘Earnest Money Deposit’ (also known as Escrow) that is involved in a real estate transaction.   EMD is a deposit made to a seller, held by a title company or state authorized escrow agent, that represents a buyer’s good faith to buy a home or other commercial real estate property or entity.  Sellers will normally require an EMD upon acceptance of a sale/lease agreement with the amount ranging from 5% to 30% of the purchase price.  In most real estate transactions, accepted purchase offers become completed sales and the buyer’s earnest money is applied to the closing expenses or down payment. However, if a real estate transaction falls apart or is mutually terminated by both the buyer & seller, earnest money is disbursed in accordance to the contract.  Typically, it is returned to the buyer unless the buyer has defaulted or otherwise violated the contractual terms of the purchase agreement. –Tony Caprarese, Associate Broker


“Ask a Broker!” is a weekly blast that provides you with the information and tools to navigate commercial real estate transactions. These helpful tips are here to get you started and answer business basics. In addition to giving you these starter tidbits of information, our brokers are more than happy to provide personalized feedback on your real estate goals and questions. To have your questions answered, give our office a call at (734)663-0501.

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