Contracts
An 'earnest money deposit' serves to:
APay for the buyer's home inspection
BDemonstrate the buyer's good faith and financial ability to perform the contract✓ Correct
CPay the broker's commission in advance
DCover the seller's closing costs
Explanation
An earnest money (good faith) deposit demonstrates the buyer's serious intent and financial ability to perform the contract. In New York, it is typically held in the seller's attorney's escrow account.
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