What is the common term for money paid upfront to secure a real estate transaction?

The correct term for money paid upfront to secure a real estate transaction is "Earnest Money." This payment demonstrates the buyer's seriousness and commitment to the transaction. Earnest money serves as a form of security for the seller, showing that the buyer is earnest in their intention to follow through with the purchase. Typically, this deposit is held in an escrow account until the transaction closes, at which point it can be applied to the down payment or closing costs.

In the realm of real estate, earnest money can also be referred to as a "Good Faith Deposit." While it conveys a similar meaning, earnest money is the more widely recognized term specifically used in transactions. Commission relates to the fees paid to real estate agents for their services, and closing costs refer to the expenses incurred during the finalization of the transaction, not the upfront payment that secures the deal. Thus, earnest money best captures the essence of the upfront payment made in securing a real estate transaction.