Default
When one side fails to meet its obligations under a contract or loan. In a purchase, the contract spells out remedies, which often include the seller keeping the earnest money.
Also called: in default, buyer default, seller default
Related terms
Failing to do what the contract requires without a legal excuse, such as not closing or missing a deadline. The other side may be able to cancel, keep the deposit or sue.
A deposit the buyer puts down after the offer is accepted to show they are serious. It is held in escrow or a trust account and usually goes toward the down payment or closing costs at closing.
The legal process a lender uses to take and sell a property after the borrower defaults. Some states require a court case (judicial foreclosure), while others allow a faster non-judicial sale under a deed of trust.
The signed contract between buyer and seller that sets the price, deadlines, contingencies and terms of a sale. Once both sides sign, the property is under contract.