What Is Earnest Money? How Much Should I Set Aside?

Earnest money is money put down to demonstrate your seriousness about buying a home. It must be substantial enough to demonstrate good faith and is usually .5% to 1% of the purchase price. When your offer is accepted, the earnest money is deposited at the title company and is credited back to you on your statement at closing.

If you back out of a deal during the option period, the title company refunds the earnest money to you. If you terminate after the option period has expired, you typically forfeit your earnest money to the seller. More.

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