“Earnest Money” vs. “Ernest Money”
If your first name is Ernest and you were buying a house, I suppose the check you wrote to go with the Purchase Agreement could be called “Ernest money.”
However, for everyone else, the proper term is “earnest money.” 🙂
Definition
For those not familiar with earnest money, think of it as, “the down payment on the down payment.”
It actually serves two functions: 1) it serves as evidence of the Buyer’s financial wherewithal to consummate the transaction; and 2) it’s what the Seller retains if the Buyer backs out of the deal late in the process (lawyers call this “liquidated damages”).
