1031.Exchange INTELLIGENCE NETWORK
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TRANSACTION & CLOSING

Earnest money

Also called: EMD · deposit · contract deposit

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PLAIN-ENGLISH DEFINITION

Money deposited to support a buyer’s obligations under a purchase contract.

What it means in practice.

Deposit timing, refundability and conditions are governed by the contract and escrow arrangement.

Why it matters.

Compressed 1031 timelines can tempt buyers to make aggressive deposits; contract risk should still be evaluated independently.

Additional notes.

Deposit timing, refundability and conditions are governed by the contract and escrow arrangement.

CONNECTED LANGUAGE

Related definitions.

Transaction & ClosingPurchase and sale agreementThe definitive contract governing a real-estate purchase and sale.Transaction & ClosingEscrowAn arrangement in which a neutral third party holds money, documents or instructions pending satisfaction of stated conditions.
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