The earnestmoney deposit is a negotiable amount between the buyer and seller, but usually about 1% to 2% of the purchase price (although it can shoot up to 10%). This money is generally held by the seller’s broker or a title company, to be used as a credit toward the down payment and closing costs.

Earnest-money deposit is money put down to demonstrate your seriousness about buying a home. It must be substantial enough to demonstrate good faith and is usually between 1-5% of the purchase price (though the amount can vary with local customs and conditions). If your offer is accepted, the earnest money becomes part of your down payment or closing costs. If the offer is rejected, your money is returned to you. If you back out of a deal, you may forfeit the entire amount.