Contracts
In New Mexico, 'earnest money' in a purchase contract serves as:
AThe buyer's down payment to the lender
BA deposit demonstrating the buyer's good faith and commitment, applied toward the purchase price at closing✓ Correct
CA non-refundable fee paid to the broker
DPayment for the appraisal
Explanation
Earnest money is a good faith deposit that demonstrates the buyer's seriousness. It is held in trust, applied to the purchase price at closing, and may be at risk if the buyer defaults without a valid contractual excuse.
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