Contracts
In New Mexico, 'earnest money' is distinguished from the 'down payment' in that:
AThey are the same thing
BEarnest money is typically a smaller initial deposit showing good faith; the down payment is the total equity the buyer contributes at closing✓ Correct
CThe down payment is required by law; earnest money is optional
DEarnest money is non-refundable; down payment is always refundable
Explanation
Earnest money is an initial good faith deposit (a portion of the purchase price), while the down payment is the total equity contribution the buyer makes at closing. Earnest money typically applies toward the down payment.
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