Question

A buyer pays a deposit to the seller in advance before completing the transaction. which term best defines this?

A: down payment
B: Earnest money
C: mortgage application fee

Answer 1

B

Explanation:

Answer 2

B. Earnest money

Explanation:

We have the statement,

'A buyer pays a deposit to the seller in advance before completing the transaction'.

'Earnest money' is 'the amount deposited by the buyer to the seller in advance, as a representation of a good faith to buy the required thing'.

Thus, we see that the statement represents 'Earnest money'.

So, option B is correct.