Contracts
Earnest money in a New Mexico purchase contract is best described as:
AThe buyer's down payment
BA deposit showing the buyer's good faith intention to complete the purchase✓ Correct
CA non-refundable fee paid to the listing broker
DThe seller's guarantee of performance
Explanation
Earnest money is a deposit made by the buyer to demonstrate good faith intent to complete the purchase. It is held in trust and applied to the purchase price at closing, or returned/forfeited per contract terms.
Related New Mexico Contracts Questions
- In New Mexico, what is a 'release of contingency'?
- Under the Statute of Frauds, real estate contracts in New Mexico must be:
- The parol evidence rule in New Mexico real estate contracts means that:
- A real estate contract signed by a minor is generally:
- A buyer in New Mexico submits an offer. The seller changes the price and signs. This creates:
- What is the effect of a counteroffer in a real estate transaction?
- In New Mexico, a 'lease with option to purchase' gives the tenant-buyer the right to:
- When a seller accepts a buyer's offer, what is created?
Practice More New Mexico Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free New Mexico Quiz →