Contracts
In New York, a 'contract deposit' held by the seller's attorney is typically:
AUsed to pay the broker's commission at closing
BApplied toward the purchase price at closing, or returned if the buyer cancels under a valid contingency✓ Correct
CForfeited to the attorney if the deal falls through
DNon-refundable under any circumstances
Explanation
The contract deposit (earnest money) is applied toward the purchase price at closing. If the buyer legitimately cancels under a contingency (e.g., financing, inspection), the deposit is typically returned. If the buyer defaults without cause, the seller may retain it as liquidated damages.
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