What is Earnest Money: Understanding Real Estate Vocabulary

This is like making a down payment. An earnest money deposit shows that you are committed to buying that house. It is deposited within a few days of your offer being accepted. The earnest money is typically credited back to the buyer at closing. If the transaction doesn’t close, the earnest money may refunded to the buyer or retained by the seller depending on how the purchase agreement is written. Typically if the buyer decides to back out of the purchase agreement during the inspection period or is unable to obtain the financing outlined in the purchase agreement, the earnest money will be refunded to them.