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Washington State Law on Earnest Money Agreement

Washington State also applies the real estate excise tax to sales of “majority interests” to companies that own real estate in the state. For a corporation, a “controlling interest” means 50% or more of the total voting shares or 50% or more of the capital, profits or economic interest in the voting shares. For companies other than companies, a “majority stake” is 50% or more of the capital, profits or economic participation in the company. (2) Excise Duty on Real Property: The State of Washington imposes a tax on the sale of real estate. The state tax rate is 0.0128%, although counties or municipalities may levy additional taxes. The tax applies to the seller, but the buyer may be held liable for the tax if it cannot be collected by the seller. The tax is usually levied by the county upon presentation of sales documents for entry in the public record. While there is a fiduciary duty based on customary law to someone for whom funds are held to be held by another, you do not want to have to appear before a judge to have that confirmed. This is the preferred practice of depositing serious funds for a real estate purchase and sale contract with a neutral third party, usually the securities company, which also provides fiduciary services. Some real estate companies and contracts still allow the buyer`s or seller`s broker to hold serious money before closing the trust account. While the legal requirements for how a real estate agent accounts for real money are relatively specific, a waiver signed by both parties generally makes it easier to terminate the contract without litigation if a neutral third party holds the funds.

Many disputes over the purchase of real estate revolve around the right to real money in the event of a breach of a purchase and sale contract. Purchase and sale agreements often mention the forfeiture of real money as the exclusive remedy for breach by the buyer. In these cases, damages for a buyer`s loss are essentially known in advance and therefore represent a form of lump sum damages. In addition, according to RCW 64.04.005(1), the money to be lost cannot exceed 5% of the total purchase price. Summary: If you plan to take out a mortgage and buy a home in Washington State, you will need to deposit a security deposit. This article will describe some of the most common questions buyers have about serious cash deposits in the state. If you`re involved in a property purchase and sale agreement where a potential buyer has opted out of an offer to buy a property, you probably want to know who can keep serious money offered to buyers as part of their offer to buy. The most popular form of serious money transfer is to use wired funds, where a bank securely transfers the approved amount to the trust. (Buyers should always be careful when transferring money – or face unfortunate consequences.) Buyers sometimes make an offer for another home that is more suitable.

Without a legitimate reason to deliver, they may lose their initial money. In other cases, buyers miss a deadline (usually to complete the home inspection and make repair requests) and then make unjustified requests for more time. Sellers don`t like it when a deal fails, but they also don`t want their home taken off the market while a buyer hangs around. This issue is one of the oft-cited omissions that lead to disciplinary action by the DOL. Brokers do not have the necessary receipts or other evidence in the transaction files and/or brokers have no evidence that in case of default of payment of the buyer on time, the seller has been informed of the failure of the buyer. DOL is responsible for this matter because brokers are required by RCW 18.86.030 (Agency Act) to disclose “material facts”. DOL is legally permitted to apply rcW 18.86.030 and DOL interprets the term “material fact” to include a buyer`s failure to make a serious deposit in a timely manner. Accordingly, DOL requires strict adherence to the documentation protocols described above and disclosure to Seller of any failure by Buyer to make a timely deposit. There are still questions about money and other financial aspects of residential real estate. Here are four buyers: A. Interpretation of the contract.

When reviewing a contract to buy and sell a property, you should not accept anything and check everything. Washington follows the “objective” theory of contract interpretation, in which courts examine the wording of the contract to determine the intent of the parties. Most contracts for the purchase and sale of real estate in Washington have standardized provisions, the modifications of which can be negotiated by the parties. If a party to a purchase and sale agreement violates (or allegedly violates) the agreement and the parties are unable to resolve their issues amicably, the trustee holding the Earnest Money will exchange the Earnest Money deposit funds with the court so that the parties can assert their respective claims to claim those funds….