A good faith deposit is a sum of money provided by a buyer to a seller, which demonstrates the buyer's intention to purchase.
For instance, if you've decided on a home you want to buy, you generally make a good faith deposit to support your bid.
A good faith deposit, also called a binder or earnest money, is usually a fixed amount that's standard in the community where you're buying. It's different from a down payment. That's a larger cash payment, figured as a percentage of the purchase price, which you make when you sign the contract to purchase the property.
If you and the seller can't agree on the terms of the sale, you generally get your good faith deposit back.
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