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Earnest Money Deposit

An earnest money deposit is the initial deposit you make with an offer to purchase real estate.

How Much Should You Put Down With Your Offer?

After you have come up with an offer price, the next step is to determine how large a deposit you want to make with your offer. Determining what to put down on a home depends on your offer strategy. You want the earnest money deposit to be large enough to show the seller you are serious, but not so large you are placing significant funds at risk.

One recommendation is to make sure your initial deposit for a thousand dollars and then include a second deposit after the inspection is complete for the balance of 10 to 20 percent. This shows the seller you are willing to put up an significant amount once the inspection is complete, but you aren’t willing to risk that much until you are sure the home is in decent shape.

At other times, your strategy may be different when you are trying to get a significant discount of the list price of a home for sale. Since large deposits do impress sellers, you may find that by making a larger deposit that normal you can convince the seller to accept the lower offer. More money up front may save you money in the end.

Also, during a hot market there may be multiple offers on the property that interests you. A large deposit may impress a seller enough so they will accept your offer instead of someone else’s, even when your unknown competitor is offering the same price or slightly higher.


  1. Gracye on December 24, 2011 at 5:00 am

    You’ve impreessd us all with that posting!

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