What is an agreement that may accompany an earnest money deposit to show intention to complete a property purchase?

The term "binder" refers to a type of agreement that accompanies an earnest money deposit to indicate the buyer's serious intention to fulfill the terms of a real estate purchase. This document serves as a preliminary commitment that provides assurance to the seller that the buyer is earnest in their offer and intends to move forward with the transaction. The binder often outlines key details, such as the purchase price, and is usually a short form of agreement that helps solidify the intention of the parties involved.

In the context of real estate, using a binder can help lay the groundwork for a more formal purchase agreement to be negotiated later. It highlights the buyer's commitment and helps to demonstrate good faith, which is crucial in establishing trust during negotiations. This is particularly relevant in real estate transactions, where significant amounts of money and investment are at stake, and parties need to protect their interests throughout the process.