Earnest Money

Typically, if the offer is accepted, the earnest is kept by the seller and subtracted from the purchase price, or is kept in escrow until closing, when it is applied to the buyer's portion of the remaining costs. If the offer is rejected, the earnest money is usually returned. If the buyer retracts the offer, the earnest is forfeited.

Anciently, it was called an earnest penny, and also known as '''Arles penny''', '''God's penny''', or '''Argentum Dei'''. It signified money given to bind a Bargain , especially for the purchase or hiring of a servant. ''Et cepit de praedicto Henrico tres denarios de Argento Dei prae manibus''. Another related term was '''luck money''', which was an amount given back to the buyer, by the seller, on the completion of a deal, for Luck .

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Earnest Money