Contracts
What is earnest money in a real estate transaction?
AThe buyer's down payment
BA good faith deposit showing the buyer's serious intent to purchase✓ Correct
CThe seller's legal fee
DA prepaid closing cost
Explanation
Earnest money is a deposit made by the buyer to demonstrate serious intent to complete the purchase. It is held in escrow and typically applied to the purchase price at closing or forfeited if the buyer defaults.
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