Earnest Money

Earnest money is a deposit made by a buyer to demonstrate commitment to a property transaction. It can serve as security for the proposed transaction while the parties complete the remaining requirements. The consequences of cancellation can depend on the contractual terms. The buyer may potentially lose the deposit, while the seller may have obligations concerning its return or compensation. Because the treatment of earnest money can have legal consequences, the relevant agreement should clearly state the amount, purpose, refund conditions, and consequences of default.

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