Which of the following COULD NOT serve as an earnest money deposit?

Which of the following COULD NOT serve as an earnest money deposit?

• A. A handshake with a verbal agreement to pay later
• B. T's personal property
• C. T's pet pig, Wilbur
• D. A written IOU for $100

Answer: (A)

An earnest money deposit represents a buyer's serious intention to purchase a property and typically takes the form of cash or equivalent. A handshake accompanied by a verbal agreement does not provide any tangible or secure form of commitment or proof of intention to the seller. Without a financial or physical asset involved, there is no valid means to enforce or uphold the agreement should disputes arise. Forms of earnest money deposits like personal property or a written IOU would hold more value than a mere handshake. Personal items may have worth, and an IOU signifies an obligation to pay, albeit in an informal manner. Even a pet, while unconventional and not advisable, represents an asset that could carry potential value in a unique context. In contrast, the absence of a formalized commitment in the form of a handshake leaves too much ambiguity, failing to fulfill the necessary requirements of earnest money.

An earnest money deposit represents a buyer's serious intention to purchase a property and typically takes the form of cash or equivalent. A handshake accompanied by a verbal agreement does not provide any tangible or secure form of commitment or proof of intention to the seller. Without a financial or physical asset involved, there is no valid means to enforce or uphold the agreement should disputes arise.

Forms of earnest money deposits like personal property or a written IOU would hold more value than a mere handshake. Personal items may have worth, and an IOU signifies an obligation to pay, albeit in an informal manner. Even a pet, while unconventional and not advisable, represents an asset that could carry potential value in a unique context. In contrast, the absence of a formalized commitment in the form of a handshake leaves too much ambiguity, failing to fulfill the necessary requirements of earnest money.