How does earnest money deposited appear on the estimated purchaser cost sheet?

The earnest money deposit appears as a credit to the buyer on the estimated purchaser cost sheet because it represents a portion of the buyer's funds that are being applied toward the purchase of the property. When a buyer makes an earnest money deposit, they demonstrate their intention to follow through with the transaction, and this amount is generally subtracted from the total closing costs or purchase price. This credit effectively reduces the amount the buyer needs to bring to closing, reflecting the fact that the earnest money is being applied toward the overall cost of acquiring the property.

Credits are used in these financial statements to clearly show how various funds are accounted for in the purchasing process, allowing for a straightforward understanding of the financial commitment involved. Thus, it is important for buyers to see this as a credit so they can accurately assess their total financial obligation when closing on the property.