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What is Earnest Money?

In this video, Millionacres explains earnest money and why you might need an earnest money deposit on your next real estate deal. Earnest money signals to the seller that the buyer is serious about the purchase. The deposit protects a seller from buyers who might otherwise enter several contracts or back out of a deal last minute. If all goes well, your earnest money can usually be applied to your final purchase. Read your contract thoroughly and understand the circumstances under which you will and will not get that money back. The last thing you want to do is throw your earnest money away accidentally, especially if it ends up being a substantial sum.