EARNEST MONEY

The money given to the seller by the buyer to demonstrate the buyer's good faith. If the deal falls through, the deposit is usually forfeited.

Money deposited by a buyer under the terms of a contract, to be forfeited if the buyer defaults but applied to the purchase price if the sale is closed.

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Money given by the Buyer with an offer to purchase. Shows good faith.

The deposit money given to the seller or his agent by the potential buyer upon the signing of the agreement of sale to show that he is serious about buying the house. If the sale goes through, the earnest money is applied against the downpayment. If the sale does not go through, the earnest money will be forfeited or lost unless the binder or offer to purchase expressly provides that it is refundable.