Which document is essential to demonstrate the buyer's intent in a real estate transaction?

In a real estate transaction, an earnest money deposit is essential as it demonstrates the buyer's intent to follow through with the purchase of a property. This deposit acts as a show of good faith that signals the buyer's commitment to the deal. By providing an earnest money deposit, the buyer is indicating seriousness in their offer, which can help persuade the seller that they are genuinely interested in completing the transaction.

While other documents, such as the contract of sale, come into play later in the process, the earnest money deposit specifically relates to the initial intent to engage in the transaction. It helps protect the interests of both parties; if the buyer withdraws without a valid reason, the seller may keep the deposit as compensation for their time and effort. This financial commitment is often a key factor in negotiations and can be a distinguishing feature when multiple offers are on the table.