Legally, how much earnest money must be submitted with a valid purchase and sale agreement?
A. 1% of the purchase price
B. 3% of the purchase price
C. 5% of the purchase price, but the amount over 3% cannot be retained as liquidated damages
D. No earnest money is required
Answer: D. No earnest money is required
While almost all buyers will include an earnest money deposit along with the purchase and sale agreement, that is because of tradition. There is no contractual or legal requirement of a particular amount, or any earnest money at all.
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