Ask the Real Estate Agent: What are Earnest Money Deposits?

by Dan Lesniak

Earnest Money Deposits


Recently, I’ve been receiving questions from buyers and readers asking about earnest money deposits.


Earnest money deposits or EMDs are deposits that the buyer make at the time of ratifying a contract with sellers. It is held by a third party, usually a real estate brokerage or title company. It is a good faith testament from the buyers to the sellers that they are serious about the contract.


EMDs are typically range from 1 to 5 percent of the contract price. If the down payment is lower, the trend is toward the lower end of the spectrum. If the down payment is higher, the trend is toward the higher end of the spectrum. On average, you will see it being 3 to 5 percent.

In both a competitive or non-competitive scenario, a higher EMD can make your offer stronger as a buyer to the seller. Sellers typically feel better about offers with higher EMDs because it shows how serious you are about the home purchase. Sellers may even be willing to negotiate more with higher EMDs.

If you have any questions regarding any of this information or if you have a general question about real estate, feel free to comment below, send us an email at [email protected] or give us a call at 571-969-7653.


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