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what are liquidated damages in real estate and how do they affect you as the seller thats our topic lets get started [Music] hi im kim ward welcome back to my channel if youre new here i am a real estate broker and an expert with helping executors administrators and trustees with homes in probate or trust you may never have heard of liquidated damages so what are liquidated damages in real estate and how do they affect you as the seller a liquidated damages provision in a california real estate purchase agreement provides for a buyer to owe a certain amount of money to the seller in the case where they do not complete a transaction but there are some rules that ill be sharing with you about how liquidated damages truly work for example if your buyer has placed five thousand dollars as an earnest money deposit into escrow and the liquidated damages clause is initialed by both the buyer and you the seller and then your buyer bdocHubes the contract you as the seller may be entitled to