You need to know – What is an earnest money deposit?

YouNeedToKnowWeb500An earnest money deposit (also known as a good faith deposit or binder deposit) is an amount paid in good faith by a buyer when making an offer

The deposit normally accompanies the written contract offer and will be held in trust in an escrow account

If the offer is rejected by the seller the deposit is returned to the buyer

If the offer is accepted by the seller then the deposit will become a part payment of the contract price

If, after the offer is accepted, and the buyer defaults, the deposit is typically forfeited to the seller as liquidated damages arising from the buyer’s failure to complete the purchase