earnest deposit

Definition

Money put down to show a seller you're serious about buying their property, essentially a financial hostage that says 'I mean business.' If you back out without a valid contingency, kiss that money goodbye.

Example Usage

They submitted a $10,000 earnest deposit with their offer to demonstrate commitment to the seller.

Origin

From 'earnest' meaning serious intent, used in contract law since medieval times

Fun Fact

While 'earnest money' and 'earnest deposit' are used interchangeably, some states legally distinguish between the two in real estate contracts.

Source: Real estate transaction terminology

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