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Simple English definitions for legal terms
hand money
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A quick definition of hand money:
Hand money: Money paid in cash to show that someone is serious about buying something, like a house. It's like a promise to buy, and if the person doesn't follow through, they might lose the money they paid. In some cases, it can be a lot of money.
A more thorough explanation:
Definition: Hand money refers to money paid in cash to bind a bargain or show a good-faith intention to complete a transaction. It is also known as earnest money.
Example: In the context of real estate, a prospective buyer may pay hand money to the seller as a deposit to show their intention to buy the property. This money is usually held in escrow and may be forfeited if the buyer defaults on the transaction.
Explanation: Hand money is a way for buyers to demonstrate their commitment to a transaction and for sellers to ensure that the buyer is serious about the purchase. The amount of hand money paid can vary depending on the transaction, but it is usually a percentage of the purchase price. If the transaction goes through, the hand money is applied towards the purchase price. If the buyer defaults, the hand money may be forfeited to the seller as compensation for any damages incurred.