Contracts
In Louisiana real estate, 'earnest money' serves as:
AThe total commission owed to the broker
BA good-faith deposit demonstrating the buyer's serious intent, applied to the purchase price or held per contract terms✓ Correct
CA penalty if the buyer obtains financing
DMandatory insurance paid to the title company
Explanation
Earnest money is a good-faith deposit that demonstrates the buyer's serious intent to purchase. It is typically applied toward the purchase price at closing or forfeited to the seller if the buyer defaults without a valid contract contingency.
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