Home Buying

What Is Earnest Money?

Earnest money is a deposit a home buyer pays after a seller accepts their offer, showing good faith that they intend to complete the purchase. It is usually held in escrow and applied toward the down payment or closing costs at closing. Amounts commonly range from about 1% to 3% of the price, depending on local practice.

Is It Refundable?

Whether the buyer gets the deposit back if the deal falls through depends on the contract's contingencies, such as financing, inspection, or appraisal conditions, and their deadlines.

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🔗 Related Terms

Escrow Account Down Payment Closing Costs Home Inspection Title Insurance

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Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.