Finance
In a Texas real estate transaction, 'earnest money' serves what primary function?
AIt is the buyer's down payment
BIt demonstrates the buyer's good faith and provides the seller with some security against buyer default✓ Correct
CIt is held by TREC until closing
DIt reduces the loan amount dollar for dollar
Explanation
Earnest money is a good faith deposit that signals the buyer's serious intent and provides the seller with a measure of security. If the buyer defaults without a valid contingency, the seller may retain the earnest money as liquidated damages.
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