{"id":15563,"date":"2024-06-27T07:57:00","date_gmt":"2024-06-27T05:57:00","guid":{"rendered":"https:\/\/www.espigul.com\/\/what-is-an-earnest-money-contract-and-what-is-it-for\/"},"modified":"2025-08-28T10:18:32","modified_gmt":"2025-08-28T08:18:32","slug":"what-is-an-earnest-money-contract-and-what-is-it-for","status":"publish","type":"post","link":"https:\/\/www.espigul.com\/en\/what-is-an-earnest-money-contract-and-what-is-it-for\/","title":{"rendered":"What is an Earnest Money Contract?"},"content":{"rendered":"

To the question: what is an earnest money contract<\/strong>, from Esp\u00edgul we want to clarify that it is an agreement signed by the seller and buyer to formalize the reservation contract for a home. An amount of money is paid, which usually ranges between 5% and 15% of the value of the property, as a pre-agreement, and its validity and term are left in writing, the latter agreed in advance.
\nThrough this operation, the buyer reserves the right to purchase and the seller agrees to deliver the property. <\/p>\n

Types of Earnest Money Contracts<\/h2>\n

Below we detail and show the different types of earnest money contracts:<\/p>\n

Withdrawal Earnest Money Contract<\/h3>\n

The withdrawal earnest money contract<\/strong> is an exception. An agreed amount of money is delivered to terminate the contract. If the buyer backs out, they lose the money previously paid (called “arras”). However, if the seller is the one who does not continue with the sale, they will have to pay the buyer twice what they paid. <\/p>\n

Guarantee or Confirmatory Earnest Money Contract<\/h3>\n

The confirmatory earnest money contract<\/strong> is intended to obligate the parties to comply with the contract. Both parties confirm the contract and commit to the sale. <\/p>\n

Penalty Earnest Money Contract<\/h3>\n

The penalty earnest money contract<\/strong> is made to ensure the purchase. If either party fails to comply, they will have to pay compensation for damages. In addition, the party that follows the contract may choose between: renouncing the contract and settling for compensation, or forcing the other party to finalize the sale, while keeping the compensation. <\/p>\n

What Must be Stated in an Earnest Money Contract?<\/h2>\n

For an optimal execution of the earnest money contract<\/strong>, it is essential to state: <\/p>\n