Contracts
A Mississippi buyer and seller reach an agreement, and the buyer gives the seller $2,000 in earnest money. The earnest money is best described as:
AA non-refundable deposit in all circumstances
BConsideration that demonstrates the buyer's good faith and is applied to the purchase price at closing✓ Correct
CA separate fee paid to the real estate agent
DRequired by law for all real estate contracts
Explanation
Earnest money is a good faith deposit paid by the buyer that serves as consideration supporting the contract. It is typically applied toward the purchase price at closing and held in escrow. It may be refundable (if contingencies are not met) or forfeited (if the buyer breaches) based on contract terms.
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