What is earnest money in terms of real estate? How much should I set aside? Well Earnest money is money put down to demonstrate your seriousness about buying a home. It must be substantial enough to demonstrate a good faith and is usually between 1% to 5% of the purchase price of a home (though the amount can very from local jurisdictions and customs and conditions. If your offer is accepted on home, the earnest deposit becomes a part of your down payment or closing costs. If th offer is rejected, your money is returned to you. If you back ouf of a deal, you may be subjecting yourself to forfeit the entire amount to the seller depending upon the terms of your contract.
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