Arbun (Earnest Money)
Down payment giving the right to proceed or cancel a sale, forfeiting the deposit.
Detailed Description
Arbun (Earnest Money)
What is the primary purpose of arbun in a transaction?
The primary purpose of arbun is to establish a binding commitment between the buyer and seller, signaling the buyer's serious intent to proceed with the transaction.
How does arbun differ from traditional earnest money?
Unlike traditional earnest money, which may be forfeited without recourse, arbun allows for a refund if the seller fails to meet their obligations, emphasizing fairness.
What conditions must be met for arbun to be valid?
Both parties must agree on a reasonable amount, the purpose of the arbun must be clearly defined, and the transaction must adhere to Islamic principles.
What happens to arbun if a buyer withdraws from the transaction?
If the buyer withdraws for legitimate reasons, they are typically entitled to a full refund; otherwise, the seller may retain the arbun as compensation.
What role does arbun play in Islamic real estate transactions?
Arbun facilitates smoother negotiations, fosters trust between parties, and aligns with Islamic values, promoting ethical dealings and accountability.