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, cash deposit, good faith gesture, earnest payment

Acronyms
EMD

Alternate Spellings
Goodfaith deposit, Earnest Payment, Good faith deposit, 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.