- Earnest money is a deposit that shows you're serious about the home.
- It's held in a trust account, not handed to the seller.
- At closing, it goes toward your down payment or closing costs.
- Your contingencies and deadlines decide when it's at risk.
How much?
There's no single required amount. It's negotiated as part of your offer and depends on the price, the market and the situation. A larger deposit can make your offer look stronger, but only put down what you're comfortable with.
Where it goes
After your offer is accepted, the earnest money is deposited in a trust account, typically held by one of the brokerages, as spelled out in your purchase agreement. It isn't handed to the seller. At closing it's credited toward what you owe.
When you could lose it
If you back out for a reason the contract doesn't allow, or miss a deadline, the seller may be entitled to keep it. That's why contingencies matter: inspection, financing and appraisal contingencies give you defined ways to exit if something goes wrong.
How to protect it
- Know every date in your purchase agreement
- Stay in touch with your lender, and don't open new credit before closing
- Schedule inspections right away
- Put every request and notice in writing, through your agent
Common questions
How much earnest money should I offer?
It's negotiable and depends on the price and the situation. A larger deposit can strengthen your offer, but choose an amount you're comfortable with.
Do I get my earnest money back?
At closing it goes toward your purchase. If the deal ends under a contingency in your contract, it's usually returned. Backing out outside the contract can put it at risk.
Who holds the earnest money?
It's held in a trust account, typically by one of the brokerages, as spelled out in your purchase agreement.
I'd like to help you find the right home and win it without overpaying. It starts with your own Buyer Game Plan: your real monthly payment, your cash to close, and where your budget goes furthest.
