Initial deposit or earnest money is a sum of money, usually in form of a personal check, put down by a buyer at the time of making a purchase offer. This check is usually held uncashed by buyer's agent until the "Acceptance" of the purchase contract takes place and then it is deposited into escrow or broker's trust account within the time permitted by the contract. At close of escrow, the deposit or earnest money is applied toward the down payment.

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Since the deposit check is held uncashed until the "Acceptance" of the purchase contract, if the offer does not turn into a contract, the check should be returned back to the buyer.

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Increased deposit is the sum of money that is, if agreed by the buyer and seller in the purchase contract, to be deposited into escrow on certain date(s) or upon certain events happening during the course of a transaction. For example, the contract may call for a certain amount of Increased deposit to be deposited into escrow upon removal of financing contingency. At close of escrow, the increased deposit is applied toward the down payment.

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A trust account is a bank account maintained separately by a real estate broker or a brokerage firm to safeguard funds for the broker’s or brokerage firm’s clients. Funds such as initial deposit (earnest money) submitted by a buyer on a piece of property are sometimes held into a trust account and are later transferred to escrow holder.

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Forfeiture is seller keeping buyer’s deposit (good faith or increased deposit) that was put down to secure a purchase of a property. If there is a breach of the contract by the buyer and if the contract calls out for a forfeiture of deposit, seller may forfeit buyer’s deposit. If such a situation occurs, both parties need to seek legal counsel.

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