What is the best method to protect the deposit I put down on the business I am purchasing?
Sample Deposit Clause:
Buyers have deposited with Sellers the sum of $__________as earnest
money. The same is to be applied to the cash down payment on closing of
this transaction. Should Buyers require approval for a specified loan for any
part of the purchase price, and after applying therefore in good faith, be
unable to secure such loan, then the earnest money shall be returned in full
to Buyers. However, if within ___days Buyers refuse to diligently pursue
loan approval, or fail or refuse within ____days after the issuance of a loan
commitment, to execute all documents necessary for said loan, Buyers shall
be considered in default under the terms of this contract. This contract shall
expire on (date) at (time). If Buyer has not performed under the contract by
said date, Sellers shall be entitled to the earnest money without reduction.
Provided however, if the title to the property is defective, then the earnest
money will be returned to the Buyers.
How the funds are held (e.g., escrow account) is negotiable.