Facebook
X
Pinterest
Copy Link
Buying your first home is exciting, but it can also feel like you’re learning a brand-new language. One term you’ll likely hear early in the process is “earnest money.”
What does it mean?
Earnest money is a deposit a buyer puts down to show they’re serious about purchasing a home. Think of it as a “good faith” payment—it reassures the seller that you’re committed to moving forward.
How much is it?
The amount can vary, but it’s often 1–3% of the purchase price. For example, if you’re buying a $200,000 home, your earnest money might be between $2,000–$6,000.
What happens to it?
Your earnest money isn’t an extra fee. If the deal goes through, it’s applied toward your down payment or closing costs. If something falls through because of a valid contingency (like financing or inspection issues), you usually get it back.
Why does it matter?
Putting down earnest money shows sellers you’re serious, which can make your offer stronger—especially in competitive markets.
Takeaway: Earnest money is simply a sign of commitment. It’s a small but important step in showing you’re ready to buy.
Have questions about earnest money or any part of the buying process? I’d be happy to walk you through it—reach out anytime!
