Acceptance of an offer, definition of equity

Dear George: My husband and I are working with a REALTOR® to find a home. We made an offer on one that was in foreclosure and, after a few counters on both sides, we reached an agreement. After submitting our signed paperwork and earnest-money deposit, we were told the sale would not happen because the house had been sold to a mortgage insurance company. We've been told that we'll get our earnest money back, but how could this happen?

Answer: Your agent should have told you that your offer isn't accepted until the seller signs it, initialing any changes, and the seller's agent tells you or your agent of your offer's acceptance. Too many buyers mistakenly think that their offer is accepted when a seller or his agent says so. You were told your offer was accepted before it had been signed by the seller, or the seller did not have the authority to accept your offer since a mortgage insurance firm ended up with your property.

Dear George: If I make a $60,000 downpayment when I buy a house, does that mean I have $60,000 in equity when I sell it?

Answer: Yes, but only if the house holds its value or appreciates.

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