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Back To: Real Estate, Personal, & Intellectual Property
What is Earnest Money?
Earnest money is a payment made in good faith to secure a transaction. This payment is made by buyer to the seller (service provider). It is mostly made in real estate transaction. It is made to ensure that transaction will be completed at some point in the future. If a buyer does not complete the transaction according to the underlying agreement, the earnest money will be forfeited to the seller.
How is Earnest Money Used?
Earnest money provides security for a contract. When buyer pays earnest money it is either retained with seller or held by a third party (escrow agent). The amount of earnest money is deducted from the amount owed at the finalization of the transaction. The amount of earnest money varies depending upon the type of transaction and location. In some countries, it is a percentage of sale price (e.g. 5% or 10%). In some places, the amount of earnest money is fixed. In these places, buyers pay a fixed amount of earnest money at the time of contracting.
Related Topics
- Property Law (Intro)
- Tangible and Intangible property?
- Knowledge Capital
- Calculated Intangible Value
- Real and Personal Property?
- Chattel
- Littoral Land
- Fixtures?
- Appurtenance
- Readily Removable Fixtures
- What is ownership?
- Role of Government in ownership of property?
- Allodial System
- Role of property rights in economic activity?
- What are the limitations on property ownership rights?
- What is nuisance?
- What is Zoning?
- What is Eminent Domain?
- Just Compensation
- What is Property Taxation?
- Assessment Ratio
- Millage Rate
- Homeowners Association (HOA)
- Accession?
- Rule of First Possession?
- Lost or Mislaid Items?
- Adverse Possession?
- Encroachment
- Contracts?
- Gift?
- Confusion?
- Establishing and transferring ownership in real property?
- Absolute Title
- Warranty Deed
- Register of Deeds
- Conveyance
- What is a fee simple interest in real property?
- Absolute Interest
- Restrictive Covenant
- What is a life estate in real property?
- What is a leasehold estate in real property?
- What are common types of co-ownership relationships in real property?
- Owning Real Estate Personally vs as LLC
- What if Co-Owners of Real Estate Want Out
- Community Property and Separate Marital Property?
- What is an easement interest in real property?
- What is a license of real or personal property?
- Bundle of Rights
- Absorption Rate
- Fair Housing Act
- Federal Housing Administration (FHA)
- Housing and Urban Development (HUD)
- National Housing Act
- Design Build Contract
- Building Permits
- Certificate of Acceptance
- Construction Surety Bond
- Acquisition, Development, and Construction Loan (ADC)
- Flipping (Real Property)
- Buy, Strip, and Flip
- Homeowner Affordability and Stability Plan
- Building Residual Method
- Accessory Dwelling Unit
- Property Management
- Cost-Plus Contract
- Real Estate Investment Fund
- Listing Agreement
- Property Lawyers
- Multiple Listing Service
- Home Equity
- Register of Deeds
- Title Search
- Opinion of Title
- Certificate of Title
- Abstract of Title
- Chain of Title
- Clear Title
- Cloud on Title
- Defective Title
- Defect of Record
- Action to Quiet Title
- Abeyance
- Encumbrance
- Affidavit of Title
- Warranty of Title
- Title Insurance
- American Land Title Association (ALTA)
- Earnest Money
- Private Mortgage Insurance
- Closing (Property)
- Settlement Statement
- Real Estate Settlement Procedure Act (RESPA)
- HUD-1 Form
- Closing Statement
- Closing Costs
- Buying Real Estate as an LLC
- What is a mortgage?
- What are the Rights of a Mortgage Holder?
- Deed of Trust or Security Deed?
- Trust Deed
- Certificate of Release
- Judicial Foreclosure
- Lis Pendens
-
Deficiency Judgment
- Short Sale
- Homeowners Protection Act
- Deed in Lieu of Foreclosure
- Tax Deed
- Tenancy at Will
- Closed End Lease Definition
-
One Percent Rule
- Net Lease
- Triple Net Lease (NNN)
- True Lease Definition
- Land Lease Option
- Hell or High Water Contract
- Habendum Clause
- Attornment
- Implied Warranty of Habitability
- Emblements Definition
-
Co-Tenancy Clause
- What is a bailment?
- Consignment
- Unilateral-benefit and mutual benefit bailments?
