What does a buyer typically provide to demonstrate serious intent to purchase a property?

A buyer typically provides an earnest money deposit to demonstrate serious intent to purchase a property. This deposit is a sum of money paid upfront, which shows the seller that the buyer is committed to the transaction and is acting in good faith. The amount can vary but usually represents a small percentage of the property's purchase price. If the transaction proceeds to closing, this deposit is often applied toward the down payment or closing costs. If the buyer backs out of the deal without a valid reason as outlined in the purchase agreement, they might forfeit this deposit, which further emphasizes its role in signaling the buyer's intent.

In contrast, other options do not effectively serve the same purpose. A bank statement may provide insight into the buyer's financial situation, but it does not indicate commitment to the specific transaction. An offer letter expresses a buyer's interest in purchasing a property, but it lacks the financial commitment that an earnest money deposit entails. A property inspection report is useful in assessing the condition of a property but does not demonstrate the buyer's intent to purchase. Thus, the earnest money deposit is the most direct and effective way for buyers to prove their seriousness in a real estate transaction.