Earnest Money

A deposit made to a seller showing the buyer's good faith in a transaction. Often used in real estate transactions, earnest money allows the buyer additional time when seeking financing. Earnest money is typically held jointly by the seller and buyer in a trust or escrow account.

An earnest money deposit shows the seller that a buyer is serious about purchasing a property. When the transaction is finalized, the funds are put toward the buyer's down payment. If the deal falls through, the buyer may not be able to reclaim the deposit. Typically, if the seller terminates the deal, the earnest money will be returned to the buyer. When the buyer is responsible for retracting the offer, the seller will usually be awarded the money.

Investment dictionary. . 2012.

Look at other dictionaries:

  • earnest money — earnest mon·ey n: money used as earnest Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. earnest money …   Law dictionary

  • Earnest money — Earnest Ear nest, n. [Prob. corrupted fr. F. arrhes, L. arra, arrha, arrhabo, Gr. arrabw n, of Semitic origin, cf. Heb. [=e]r[=a]v[=o]n; or perh. fr. W. ernes, akin to Gael. earlas, perh. fr. L. arra. Cf. {Arles}, {Earles penny}.] 1. Something… …   The Collaborative International Dictionary of English

  • earnest money — money given to a seller by a buyer to demonstrate the buyer s good faith. If the deal falls through, the deposit is usually forfeited. Bloomberg Financial Dictionary * * * earnest money earnest money ➔ money * * * earnest money UK US noun [U] ►… …   Financial and business terms

  • earnest money — A sum of money paid by a buyer at the time of entering a contract to indicate the intention and ability of the buyer to carry out the contract. Normally such earnest money is applied against the purchase price. Often the contract provides for… …   Black's law dictionary

  • earnest money — money paid as security …   English contemporary dictionary

  • earnest money — noun money given by a buyer to a seller to bind a contract • Syn: ↑arles • Hypernyms: ↑earnest …   Useful english dictionary

  • earnest-money — n. Earnest, pay in advance (to bind a bargain), handsel …   New dictionary of synonyms

  • earnest money — noun Money paid as a deposit to show intent to buy or to reserve an item to be purchased; especially, money accompanying an offer to buy real estate …   Wiktionary

  • earnest money — Law. money given by a buyer to a seller to bind a contract. [1550 60] * * * …   Universalium

  • earnest money — ear nest mon,ey noun uncount AMERICAN money that you pay to show you intend to do what you have promised to do …   Usage of the words and phrases in modern English

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