Calculate earnest money for real estate transactions.
Typical range: 1-3% of purchase price
Minimum Recommended
1% of price
Competitive Amount
3% of price
A deposit made to demonstrate good faith and serious intent to purchase a property. It's held in escrow and applied toward the down payment or closing costs.
If the purchase falls through due to contingencies (inspection, financing, appraisal), you typically get your earnest money back. Review contract terms carefully.
You may forfeit earnest money if you back out without a valid contingency. Higher amounts show commitment but increase your financial risk.
In competitive markets, higher earnest money can make your offer stand out. Consider your financial comfort level and market conditions.
Check recent comparable sales and current market conditions in your area
Ensure your contract includes appropriate contingencies to protect your deposit
Only offer what you can afford to potentially lose if things go wrong
Keep all earnest money receipts and escrow agreements for your records
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