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What is earnest money and how much should I put down?

By Bob Millaway, South Jersey Community Expert & REALTOR®

Earnest money is a deposit you make when your offer is accepted to show the seller you are serious. It is typically 1 to 3 percent of the purchase price. In competitive markets, a higher earnest money deposit can strengthen your offer. The money is held in escrow and credited toward your down payment or closing costs at closing.

Why It Matters

A strong earnest money deposit shows sellers you are committed. But make sure you have contingency protections so you do not lose the deposit if the deal falls through.

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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