earnest money

noun

Law.

1. money given by a buyer to a seller to bind a contract.

Word History and Origins

Origin of earnest money¹

First recorded in 1550–60

Example Sentences

If the buyer changes their mind for any reason within 14 days, Conner Homes refunds the earnest money and cancels the transaction.

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“With new construction, you usually only have 15 to 30 days, depending on the contract, to get your earnest money back,” Rueth says.

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Some contracts will provide that the buyer loses his earnest money or down payment if the buyer fails to close on the purchase of a home.

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Home buyers face pressures to waive financing protections and put forward as much cash as they can in their down payment and as part of a deposit known as earnest money.

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Once the contingency period expires, the seller might technically be able to keep the earnest money, depending on the language in the contract.

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Related Words

• deposit