down payment. In the real world, to prove your offer to purchase a property is ?earnest,? or in good faith, you need to put money on the table as soon as the ink of your signature dries on the purchase contract. Its important to know that this earnest money deposit is not an extra cost of buying a home. It will be credited to you towards the down payment at closing.
It is important to identify in the contract what is going to happen if the real estate contract is canceled. It is also critical that the earnest money be paid to a title company and not the real estate brokerage or seller directly.