Under TREC rules, the term 'earnest money' in a Texas real estate transaction refers to:
Correct Answer
C) A deposit made by the buyer to demonstrate good faith and commitment to the purchase
Earnest money is a deposit made by the buyer to show good faith and commitment to the purchase. It is typically held in the broker's trust account until closing, when it is applied to the buyer's costs, or returned/forfeited according to the contract terms.
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