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Every situation is different, but broadly speaking, the seller gets to keep the earnest money if the buyer decides not to go through with the home purchase for reasons not specified as part of the contract.

To accept your written offer to buy the home, the seller must sign the offer. When making an offer, home buyers often also provide ?earnest money,? which is usually 1-3 percent of the purchase price. If the offer is not accepted, the money is returned.

Earnest money is usually paid by certified check, personal check, or a wire transfer into an escrow account. The deposit is made when the home sales contract or purchase agreement is signed. However, in some cases, a check can accompany the offer.

If the seller believes the buyer is violating the land contract's terms, this is called a default. Iowa Code §656.2 requires the lender to give the borrower a thirty-day written "Notice of Forfeiture of Real Estate Contract" before the seller can forfeit the land contract.

Earnest money can protect a home buyer if something is wrong with a property, and also the seller if you simply want out of the deal. Going the extra mile with a Verified Approval or an earnest money deposit can also prove to a seller that you're serious about your offer, making your offer stand out from other buyers.

Disclosure Laws for Iowa Home Sales Iowa Code 558A requires sellers to deliver written disclosure statements to a person interested in buying a property before they have made a formal offer or the offer has been accepted.