Now imagine the person buying your home decides they no longer want to buy your property because they found one, they have a stronger interest in.
Now, if you’ve ever bought or sold a property, you know that the closing process doesn’t happen overnight. So, you could possibly be a month or more into the process when the buyer drops out. At that point, the process would start over again, meaning more mortgage payments and possibly a delay on when the seller can purchase a new home.
If there had been an earnest money deposit in this transaction,
the buyer would lose their deposit. This deposit adds an incentive to only make an offer on a property you intend to buy. As a seller, assurance that the buyer intends on following through with the home buying process, adds a sense of security to this anxiety-inducing process.
While there are considerations for having the deposit refunded (e.g., an unsatisfactory inspection report, a property doesn’t appraise at an adequate price, buyer’s financing falls through), they do not cover someone backing out because they “feel like it.” Adding earnest money to an offer strengthens it, showing a buyer’s seriousness to purchase the property and adding some security to the contract.