What term describes a sum of money delivered as earnest money in a real estate transaction?

The term that describes a sum of money delivered as earnest money in a real estate transaction is indeed a deposit. In real estate, earnest money is a specific type of deposit made by a buyer to demonstrate their serious intent to purchase a property. This amount is typically held in an escrow account and serves as a good faith gesture to the seller, indicating that the buyer is committed to completing the transaction.

When the sale proceeds, the deposit is usually applied toward the down payment or closing costs. This helps to ensure that the seller does not entertain other offers while the buyer undergoes the process of securing financing and completing necessary inspections. A down payment refers to the portion of the purchase price that is paid upfront, often larger than the earnest money, while service fees and closing costs relate to various fees associated with finalizing the sale but do not refer specifically to the earnest money component. Therefore, the use of the term "deposit" accurately reflects the role of this sum in the overall transaction process.