Earnest Money Contract

An Earnest Money Contract is an agreement in a real estate transaction where a buyer provides a deposit, known as earnest money, to show serious intent to purchase the property. This deposit demonstrates commitment and is typically held by a third party, like a title company. If the deal goes through, the earnest money often applies toward the purchase price. If the buyer backs out without a valid reason outlined in the contract, they may forfeit the earnest money. It helps protect the seller by ensuring the buyer is genuinely interested and committed to the transaction.