The short and sweet answer: Yes, it does 🙂
For those who want a little something more to read: When you make an offer to purchase a property, you provide a deposit along with the offer as a show of good faith to the seller. Typically, when you make an offer on a property there are certain conditions you may want to have met before finalizing the sale. For example, you may want a home inspection done or you may want to finalize the approval of your mortgage. If the sellers agree to the conditions of your offer, then you have a certain period of time to ensure they are met. During that time, the seller is not able to accept an offer from anyone else. The deposit money shows that you are serious about your offer. If the conditions of the offer are not met and the sale is not finalized, then the deposit money would be returned to you. The sellers would then be free to accept offers from other buyers.
If the conditions are met and the sale is made final, then you are obligated to go through with the purchase. The deposit money would then go toward the down payment on your purchase. If you back out of a purchase after making the sale final, you would lose your deposit and it would be given to the seller as compensation. The seller may also pursue other legal action if they lose a significant amount of money as a result of you backing out after the sale is final.
Use a good realtor who will explain all of this in detail to you. If you are involved in a private sale and choose to buy without the guidance of a realtor, be sure to contact a lawyer to discuss how the deposit money should be handled so that you are not putting your money at risk.
