Earnest Money Is Not “Consideration”

Earnest money is not “consideration” for the TREC (Texas Real Estate Commission) contracts.

Consideration is a legal concept that describes something of value given in exchange for a performance or a promise of performance. The presence of consideration distinguishes contracts from gifts. Consideration can be a promise to do something there is no legal obligation to do, or a promise to not do something there is a legal right to do.

A real estate contract is an enforceable contract if it is in writing, shows a meeting of the minds on all terms and conditions, and is signed by all parties to the contract. The promise of the seller to sell and of the buyer to buy is sufficient consideration to support the making of a contract.

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