Contracts
An earnest money deposit is BEST characterized as:
AA fee paid to the listing broker for marketing
BConsideration provided by the buyer showing good faith and intent to complete the purchase✓ Correct
CA required government fee
DA deposit held by the seller as security
Explanation
Earnest money is a good faith deposit by the buyer that shows sincerity in the offer. It is credited toward the purchase price at closing.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
Math Concepts
State-Specific Concepts
Escrow Disputes
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