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Real Estate Word of the Day: Binder

In the context of real estate, a binder is a preliminary agreement or contract between the buyer and the seller that serves as an expression of their mutual intent to proceed with the transaction. It is also known by other names such as a "binder agreement," "earnest money agreement," or "memorandum of contract." Essentially, the binder outlines the key terms and conditions of the deal before the preparation and execution of the formal contract, such as the purchase and sale agreement. The binder serves as a formal indication that both the buyer and seller are serious about the transaction and intend to proceed with the sale.

What are some of the key elements of a binder? The binder will specify the agreed-upon…

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