Home Buying Advice - Earnest Money Deposit

Home Buying Advice - Earnest Money Deposit

OK so you have decided on how much you want to offer, but what about the earnest money deposit amount.

Earnest money is intended to show that you are serious about buying the home. But you must remember that this money can be claimed by the seller in the case where you pull out of the purchase contract and the reason for your withdrawal is not covered in the contract. So given this information you will want to make sure that the amount is enough to convince the seller you are serious but not too much to risk.

You should also take into account the current market conditions when determining your deposit amount. In a hot market you may want to offer more than you would in a slow market.

The deposit amount will also depend upon the price of the home. The more expensive the home the bigger the deposit amount. Earnest money deposit are usually in the range of $1,000 to $5,000.