Earnest Money
Earnest money is a deposit made when you submit an offer on a home.
It shows the seller that you are serious about moving forward with the purchase.
How Earnest Money Works
Earnest money is typically held in a secure account during the transaction.
The amount varies depending on the market and the terms of the offer.
What Happens to Earnest Money
In many cases, earnest money is applied toward closing costs or the purchase price.
If the deal does not move forward, what happens to the earnest money depends on the terms of the contract.
Why Earnest Money Matters
Earnest money helps create trust between buyers and sellers.
It also encourages both parties to move forward in good faith.
Understanding the Terms Is Important
Knowing when earnest money is refundable and when it may be at risk is an important part of making an offer.
Asking questions before submitting an offer can help prevent misunderstandings.
What Comes Next
Once earnest money is submitted, inspections and lender review usually begin.
Learn Hub section or try the Home Readiness Check™ to see how prepared you are for buying a home.