So read on if you’re asking yourself, “how much earnest money should I put down?”įor a home buyer’s offer to stand out, Robyn Porter, a Realtor® in the Washington, DC, metro area, tells her clients to include an EMD in their offer that will get a seller’s attention. In an aggressive real estate seller’s market, many homes receive multiple offers from anxious buyers. 1: Offering too little of an earnest money deposit amount This good-faith money is generally held by the real estate seller’s broker or in escrow by a title company, to be used as a credit toward the down payment and closing costs. The amount of earnest money is negotiable between the buyer and seller, but is usually about 1% to 2% of the purchase price (although it can shoot up to 10%).
#Earnest money skin#
How much earnest money is normal?īefore we get into the potential mistakes that home buyers often make when it comes to earnest money, it’s important to understand how much earnest money is normal, as well as typical earnest money percentages.įirst, make sure you fully grasp what an earnest money deposit (EMD) is-namely, proof that a real estate buyer is earnest, or committed to completing a sale by having skin in the game. To ensure you don’t end up among them, read on to avoid these snafus. To scare you straight, here are eight mistakes with earnest money that home buyers often make. Yes, it sounds so sincere and serious because it is-and if you get it wrong, you could lose thousands of dollars. Once home buyers find a home they love, they declare their commitment to the seller with a sizable chunk of change known as an earnest money deposit.
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