Earnest Money Deposit
Definition of term
An earnest money deposit is a deposit made by a buyer to show that they are serious about purchasing a property. The deposit is typically a percentage of the purchase price and is held in escrow until the conclusion of the sale. The earnest money deposit is usually refunded to the buyer if the deal falls through so long as they have a legitimate contingency to terminate the contract. On closing day, the earnest money deposit will be applied towards the buyer’s cash to close.