Earnest Money Calculator
Calculate earnest money deposit for real estate purchases. Determine appropriate good faith deposit amounts based on property price.
How it works
Earnest money shows serious intent to purchase. Amount varies by market conditions, property type, and local customs. Typically 1-3% of purchase price.
Example
$400,000 home × 2% earnest money = $8,000 deposit to accompany your offer and demonstrate commitment to the seller.
FAQ
How much earnest money should I offer?
Generally 1-3% of purchase price. Higher amounts in competitive markets show stronger commitment but tie up more of your cash during the transaction.
What happens to earnest money at closing?
Earnest money is credited toward your down payment and closing costs. It's not an additional expense - it's an advance payment on your purchase.
Can I lose my earnest money?
Yes, if you breach the contract without valid contingency reasons. However, you typically get it back if financing, inspection, or appraisal contingencies aren't met.
When is earnest money due?
Usually due 1-3 days after offer acceptance. It's held in an escrow account by the title company, real estate broker, or attorney until closing.
Should I offer more earnest money in competitive markets?
Higher earnest money can strengthen your offer in multiple-bid situations, showing sellers you're financially committed and serious about purchasing.