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An amount of money paid to indicate good faith in a transaction before the transaction is completed.

Earnest Money

A small amount of money that a seller requires a potential buyer to deposit before a transaction is completed. Earnest money ensures that the potential buyer is serious about the transaction and will be likely to complete it when the time comes. If the buyer subsequently withdraws from the deal, he/she usually forfeits the earnest money. It is common in real estate and securities (where it is usually called a good faith deposit). Earnest money reduces the risk to the seller. It is also called a binder.


(1) Money given as earnest money for an oral contract to purchase real estate, to bind the parties until such time as they can complete the necessary written contract. (2) A written instrument giving immediate casualty coverage for property, even though the insured may not have paid a premium or received a policy.(3) A temporary contract of title insurance in which the insurer agrees to issue a final policy if certain exceptions, such as prior mortgage liens, are removed at or before closing.

References in periodicals archive ?
Soteras CCS binders are electrolyte insoluble and work effectively with single- and multi-layer separators.
Don't buy a binder with clasps, Velcro, or zippers.
Binder had told her relatives that her husband had left the house without informing anybody.
Advances in binder chemistries validated by exposure testing have led to significant improvements in adhesion to a wide variety of exterior substrates, including chalky substrates without the use of alkyd modifiers that detract from durability.
An insured's concealment of a prior loss, for which the insured tries to back-date coverage through a binder.
In addition, there is a separate specification for unmodified bituminous binder (EN 12591 (2009) Specifications for Paving Grade Bitumen) and for polymer modified bituminous binders (EN 14023 (2010) Bitumen and Bituminous Binders--Specification Framework for Polymer Modified Bitumens).
Because of these findings, a new breast compression binder has been introduced for use immediately following surgery.
RTR binder has also been used to address the issue of increased traffic and heavier loading.
The binder, which varies in size and retails for about $125, was placed on patients in the OR and remained in place until 24 hours after surgery.
Researchers evaluated plant-produced mixtures with high RAP content (25 and 40 percent), different binders (PG64-22 and the softer PG58-28), and a control mixture with no RAP The study improved the understanding of the performance characteristics of hot-mix asphalt (HMA) mixtures with RAP at high, intermediate, and low temperatures and examined plant-produced HMA mixtures containing RAP.