Quick Definition

Earnest money is a deposit made by a buyer to a seller, demonstrating commitment to a real estate transaction.

Examples

• 1A buyer places $5,000 in earnest money to secure a purchase agreement on a $300,000 home.
• 2During a competitive market, a buyer might offer a higher earnest money deposit to make their offer more attractive.
• 3If a buyer decides to back out of a deal due to a failed home inspection, they may be able to retrieve their earnest money deposit.

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