What is known as a sum of money paid to secure a future obligation?

The term "deposit" refers to a sum of money that is paid upfront to secure a future obligation. In real estate transactions, a deposit often represents good faith money, showing the seller that the buyer is serious about purchasing the property. This amount is typically held in escrow until the transaction is completed. It acts as a financial commitment that ensures the buyer will follow through with the purchase and can be applied towards the purchase price at closing.

In contrast, choices like payment generally refer to the act of giving money in exchange for goods or services without the specific purpose of securing a future obligation. Disbursement refers to the act of distributing funds, which does not specifically relate to securing future transactions. An installment is part of a total amount paid over time, often related to loans or payment plans rather than an upfront securing of an obligation. Thus, "deposit" is the term that accurately describes a sum of money used to secure a future obligation in the context of real estate transactions.