Earnest money held by the broker serves as what for the buyer?

The correct answer is that earnest money held by the broker serves as a credit for the buyer. When a buyer submits earnest money, it is a way to demonstrate their serious intent to purchase a property. This money is typically applied toward the buyer's overall purchase price or closing costs, making it a credit toward what they will owe at the closing of the transaction.

By providing earnest money, the buyer benefits by securing their interest in the property and showing good faith to the seller, which can strengthen their negotiating position. The broker holds this earnest money in an escrow account until the sale is finalized, ensuring that the funds are safely managed.

In contrast, describing earnest money as a liability would inaccurately imply that it represents a financial burden for the buyer rather than a testament to their commitment. Considering it as merely an escrow deposit overlooks the financial benefits it provides to the buyer. Additionally, identifying it as a commission misunderstands the nature of the earnest money, as commissions are fees paid to real estate agents for their services, not a part of the transaction's earnest money aspect.