Earnest money is a deposit made to a seller showing the buyer's good faith in a transaction. Often used in real estate transactions, earnest money allows the buyer additional time when seeking financing.

How to Protect Your Earnest Money Deposit

Earnest money is typically held jointly by the seller and buyer in a trust or escrow account. An earnest money deposit shows the seller that a buyer is serious about purchasing a property.

Earnest Money - Definition, Examples, Cases, Processes

When the transaction is finalized, the funds are put toward the buyer's down payment. If the deal falls through, the buyer may not be able to reclaim the deposit.

Typically, if the seller terminates the deal, the earnest money will be returned to the buyer. When the buyer is responsible for retracting the offer, the seller will usually be awarded the difference between employee stock option scheme and employee stock purchase scheme. Dictionary Term Of The Day.

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