The Earnest Money & Escrow Explainer

Explain earnest money and escrow to my client.

My client: [BUYER / SELLER]
Earnest money amount: [FIGURE I SUPPLY]
Where it is held: [DESCRIBE]
Contract terms on deposit and refunds: [DESCRIBE]
Their sophistication: [FIRST-TIME / EXPERIENCED]

Produce:
1. What earnest money is and why it exists, in plain terms
2. Who holds it, when it is due, and in what form
3. How it is applied at closing
4. The circumstances in which it is or is not refundable —
   at a general level
5. What escrow is and what the escrow holder does
6. The questions the client should ask before wiring funds
7. A prominent wire-fraud warning

Rules:
- Do not state the legal effect of the contract's deposit
  or refund terms — mark [REFER TO CONTRACT / ATTORNEY]
- Do not supply amounts, wiring details, or deadlines I
  have not given
- Include the wire-fraud warning prominently: verify all
  wiring instructions by phone using a number obtained
  independently, never from an email
- Plain language throughout