What is Earnest Money? (Real Estate)

It is a good faith deposit.  When a buyer executes a Purchase Agreement, the contract asks how much money the buyer is willing to put up to secure the contract, showing good faith.  The Earnest Money is usually held in the listing  real estate broker’s trust account until the property closes at that point it is credited to the buyer on the settlement statement.  A strong earnest money deposit says to a seller: ” I am serious enough about purchasing your home that I’m willing to put my money where my mouth is.”

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