What is earnest money?

An earnest money deposit that shows faith on the part of the buyer usually accompanies an offer. If no contract results, the deposit is returned to the buyer. If the offer become a contract, the deposit acts to protect the seller in the event the buyer later defaults. Default by the buyer usually requires the deposit to be forfeited in favor of the seller to compensate for having removed the property from the market. 

A deposit may be in the form of money ( Cash, Cashier's Check, Wire Transfer), personal property, real property or anything of value that is capable of being converted into cash. Typically, the deposit is intended to become a partial payment of the purchase price at closing.

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