Earnest money can typically be called a deposit. However, it’s a deposit of a special kind. We call it earnest money because it’s there to show that you’re serious about engaging into contractual relationship that you’ve entered into. So if you’ve failed to follow through, if you back out of the contract, that earnest money is then given to the other side. So it’s a deposit, but it’s a deposit with conditions, and basically if you default on the contract prior to going through with the sale, then the earnest money is then provided as damages to the other party.

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