Document background
The Real Estate Earnest Money Agreement is a fundamental document in Malaysian property transactions, used when a potential buyer wishes to secure their interest in a property by providing a deposit (earnest money) before proceeding with the full purchase. This document is typically executed before the main Sale and Purchase Agreement and demonstrates the buyer's good faith intention to purchase the property. It protects both parties by clearly defining the terms of the earnest money deposit, including conditions for its refund or forfeiture, due diligence requirements, and the timeline for completing the full purchase. The agreement must comply with Malaysian property and contract laws, making it essential for property transactions in both residential and commercial sectors. It serves as a preliminary binding agreement that helps prevent either party from backing out of the transaction without valid cause, while also providing clear procedures if the sale doesn't proceed.
