What Is Earnest Money?
Earnest money is paid by the buyer and it accompanies an offer to purchase property. It is a good faith gesture on the part of the buyer, indicating to the seller that they are serious enough about their offer to purchase that they are willing to “put their money where their mouth is” with this up front payment. The amount of earnest money can be negotiated in each transaction.
At the closing the buyer will receive that earnest money back as a credit toward the purchase price.
The buyer may forfeit the earnest money to the seller in the event the buyer backs out of the transaction without cause. Check your specific purchase contract for the details related to earnest money in your transaction.