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A homebuyer's guide to earnest money

A homebuyer's guide to earnest money

Maybe this is your first home purchase or just your first home purchase in a while, but getting up to speed on earnest money is easy. Especially since we've gathered these common questions homebuyers have when it comes to making their earnest money payment.

George Clements
October 13, 2021

What does earnest money mean?

Earnest money is a payment made by a homebuyer to show the seller they are serious about buying their house.

When do I pay earnest money?

The timing of your earnest money payment is generally stated in your contract. In most cases, earnest money is due simultaneously with, or shortly after, the contract is signed by both buyer and seller.

Where does the earnest money go?

Typically, earnest money is held by a party called an “escrow agent” or “escrow holder.” The escrow holder may be a title company, a real estate office, an attorney’s office, or any other party designated in the contract.

Does earnest money go towards closing or the cost of the house?

In most cases, homebuyers receive credit for their earnest money deposit at time of closing.

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George Clements

George is a South Carolina Keller Williams real estate agent and developer with 15 years of experience. He co-founded Earnnest in 2017. George brings an endless supply of real estate knowledge and vision to the Earnnest team. He has experience from every perspective of the industry, including: individual agents, teams, groups, independent brokerages, franchise brokerages, builders and developers. George has served on multiple real estate technology committees and non-profit boards.