What is earnest money?

I get this question all the time from buyers who are looking to purchase their first home. Here's what earnest money is: it's a good-faith down payment showing the seller how serious you are about purchasing their home.

Once the transaction is accepted by the seller, then you're giving that earnest money; it's being held in a listing broker's trust account in the city of Madison. You can expect anywhere between one to three percent of the purchase price to be held as earnest money.

If all goes well, then it's used as part of your down payment at the end of the transaction. However, if it does not, then you're probably looking at hiring a real estate attorney. Let's hope that doesn't happen!

I hope this helps, take care, and we're glad you stopped by.

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