1) a sum of money given to bind the sale of real estate, or a sum of money given to ensure payment or an advance of funds in the processing of a loan. also see earnest money deposit. 2) money offered by a prospective buyer as an indication of good faith in entering into a contract to purchase; earnest money; Security for the buyer's performance of a contract. an earnest money deposit is not necessary to create a valid purchase contract because the mutual promises of the parties to buy and to sell are sufficient consideration to enforce the contract. if the buyer completes the purchase, the deposit money is applied toward the purchase price.
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