Earnest Money & Liquidated Damages

National · Contracts & Transfer of Title — free cheat sheet for the real estate licensing exam.

📄 Contracts & Transfer of Title

📋 The 1-minute cheat sheet

Earnest money: good-faith deposit — NOT required for a valid contract, NOT consideration
Held in trust/escrow — never the agent's operating account
Liquidated damages clause: seller keeps the deposit as the agreed remedy for buyer default
Other remedies: specific performance (force the sale), compensatory damages, rescission
Buyer default choices are set by the contract — read the remedies clause

Is Earnest Money & Liquidated Damages on the real estate exam?

Yes. Contracts & Transfer of Title is a scored domain on the real estate licensing exam, and this topic appears in the national portion.

Is this cheat sheet free?

Yes — every page on CinnaPrep's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.