Earnest money is money put down to demonstrate your seriousness about buying a home. The amount must be substantial enough to demonstrate good faith and is usually about 5% of the purchase price. Please note that recently higher percentages have been required, 10% or even more. If your offer is accepted your earnest money deposit becomes part of the down payment. If your offer is rejected your earnest money deposit will be returned to you. If you fail to perform (back out) of a ratified contract you may forfeit your earnest money deposit. Seek the guidance of a professional Realtor and/or real estate attorney before entering into any binding legal agreement.
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