Real Estate Term::Earnest paymentReal Estate Term:Earnest payment
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An earnest payment (sometimes called earnest money or simply earnest) is when a buyer gives of something of value (money or otherwise) to a seller at the time an agreement is made and it is accepted by the seller as an indication that the agreement is complete. For the gift to be earnest it must be given outright by the buyer to the seller with no intention of ever getting it back.
Typically, if the offer is accepted, the earnest is kept by the seller and subtracted from the purchase price, or is kept in escrow until closing, when it is applied to the buyer's portion of the remaining costs. If the offer is rejected, the earnest money is usually returned. If the buyer retracts the offer, the earnest is forfeited.
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