Blog > What Is Earnest Money in Real Estate?
Earnest money is a deposit made by the buyer to demonstrate serious intent to purchase a property. In my experience, it acts as a form of security for the seller, showing that the buyer is committed. Typically ranging from 1% to 3% of the purchase price, this money is held in escrow and applied to the down payment or closing costs. If the deal falls through due to a valid contingency, the buyer usually gets it back; otherwise, the seller may retain it. It’s an essential part of building trust in a real estate transaction.
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