Earnest Money Deposit
Definition
- Like a deposit, the buyer gives the seller money when making a formal offer to show he or she is serious about the transaction.
Notes
A down payment.
Synonyms
backing, good faith gesture, earnest payment, cash deposit
Acronyms
EMD
Alternate Spellings
Good faith deposit, Goodfaith deposit, Earnest Payment, Good-faith deposit
Related Terms and Acronyms
- Deposit — Definition,
- An act of putting a sum of money in to a bank account.
- A sum of money put towards a given transaction. In a property purchase, a deposit signifies the intent to buy, which is paid to the vendor and applied to the principal cost.
- Low Ball Offer — Definition,
- A way-below-market bid a buyer makes on a property or item.
- Trust Account — Definition,
- An account used by a law firm or real estate agent to handle earnest money, funds set aside for repairs and other money that the buyer and seller put up before closing.
