Published December 3, 2025

What is Earnest Money?

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Written by Tiffany Arcaris

What is Earnest Money? header image.

💸 Earnest money or "good faith deposit" is a deposit buyers put down to show they’re serious about purchasing a home. It’s typically a small percentage of the purchase price and is held in escrow until closing. Here’s how it works for both sides:

For Buyers, it signals commitment and helps secure the property while inspections, financing, and due diligence take place. If the contract is canceled for a valid contingency, the deposit is typically refunded.

For Sellers, it offers reassurance that the buyer intends to follow through. If the buyer backs out without a valid reason, the seller may keep the deposit as compensation.

🌟 Earnest money protects both parties and keeps the transaction on track with confidence and clarity. Reach out if you’d like help navigating the process!

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