Which of the following terms describes funds committed to the seller by the buyer to purchase real property?

The term that describes funds committed to the seller by the buyer to purchase real property is earnest money. This upfront payment signifies the buyer's serious intention to proceed with the purchase and often accompanies the offer to buy the property. Earnest money is generally placed in an escrow account and can contribute toward the buyer's down payment and closing costs. If the transaction is completed, this money typically becomes part of the closing costs. Conversely, if the buyer backs out without a valid reason defined in the contract, the seller may keep the earnest money as compensation for the lost opportunity to sell the property to other potential buyers.

The other options do not pertain to the initial funds committed in the purchase process. Loan commitment payment refers to a lender's agreement to provide a loan, improvement fees are associated with making enhancements to a property, and substitution often relates to the concept of replacement in investment or asset management rather than a buyer's commitment to a real estate transaction.