Purchase Price Deposit

C

The term "ctfa" is not a commonly used term in the context of real estate transactions. However, based on the provided answers, it seems that the question is referring to the concept of a deposit or payment made by a buyer to a seller as part of a real estate transaction.

Here are detailed explanations for the four options given:

A. Down Payment: A down payment is a portion of the purchase price of a property that a buyer pays upfront at the time of closing. It is typically a percentage of the total purchase price and is used to reduce the amount of the mortgage loan. The down payment is not refundable and serves as a commitment by the buyer to complete the purchase.

B. Escrow: An escrow account is a neutral account that is used to hold funds on behalf of the buyer and seller during a real estate transaction. It is managed by a third-party escrow agent, who ensures that all the conditions of the sale are met before releasing the funds to the seller. The funds in the escrow account can include the purchase price, as well as other fees and expenses associated with the sale.

C. Earnest Money: Earnest money is a deposit made by the buyer to the seller as a sign of good faith and commitment to the transaction. It is typically a smaller amount than the down payment and is made when the buyer makes an offer on the property. If the sale goes through, the earnest money is applied towards the down payment or closing costs. If the sale falls through due to the fault of the seller, the earnest money is usually returned to the buyer. However, if the sale falls through due to the fault of the buyer, the earnest money may be forfeited to the seller.

D. Deed of Trust: A deed of trust is a legal document that is used to secure a loan for the purchase of real estate. It involves three parties: the borrower (buyer), the lender, and a third-party trustee. The borrower transfers the property title to the trustee, who holds it in trust until the loan is paid off. If the borrower defaults on the loan, the trustee can initiate a foreclosure process and sell the property to pay off the debt.

In summary, the most appropriate answer to the question is likely C. Earnest Money, as it is a deposit made by the buyer to the seller to demonstrate good faith and commitment to the transaction, and is refundable if the sale falls through due to the fault of the seller.