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What is an earnest money deposit?

By Bob Millaway, South Jersey Community Expert & REALTOR®

An earnest money deposit is a sum you put down when your offer is accepted to show the seller you are serious. It is typically 1 to 3 percent of the purchase price and is held in escrow. If the sale goes through, it credits toward your down payment or closing costs.

Why It Matters

A strong earnest money deposit can make your offer more attractive to sellers, especially in competitive markets.

Related Questions

What should I look for during an open house? How much should I save for a down payment? What are closing costs and how much are they? What loan options are available for first-time buyers? What questions should I ask my real estate agent when buying?

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