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Earnest money — how much, when refundable, where it goes
When a seller accepts your offer, you write an earnest-money check (typically 1-3% of price). That money sits in escrow until closing. If the deal closes, it credits to your closing costs or down payment. If the deal falls apart, who keeps the money depends entirely on which contingencies were in your contract.
Published 2026-04-25 · Last reviewed 2026-04-27 · methodology
Typical amounts
Standard ranges: 1-3% of purchase price in most US markets. Hotter markets often demand 3-5% to signal seriousness.
On a $400k home: $4,000-$12,000 is typical. Sellers in competitive bidding may favor offers with $20k+ EMD.
EMD is NOT additional money on top of your purchase price. It's part of what you'll pay anyway — just paid earlier.
Where the money sits
Held by the closing agent (escrow company, title company, or in some states the listing brokerage's escrow account). NEVER directly to the seller.
The escrow holder is a neutral third party. Disputes over the deposit go to mediation/arbitration if both parties claim it.
Some states require interest-bearing accounts for EMD (Florida, California in certain conditions). Most don't — the few cents of interest aren't worth tracking.
Contingencies that protect your deposit
Inspection contingency: if the inspection reveals problems and seller won't fix or credit, you can typically back out within 10-17 days and recover the deposit.
Loan/financing contingency: if you can't get the loan you projected (credit issue, income drop, appraisal low), you back out and recover.
Appraisal contingency: if the appraisal comes in below the agreed price and seller won't reduce, you back out.
Title contingency: if title search reveals encumbrances seller can't clear, you back out.
Sale-of-current-home contingency (rare in hot markets): if your current home doesn't sell by date X, you back out.
When you LOSE the deposit
Backing out for non-contingency reasons: changing your mind, finding a different house, deciding the neighborhood feels off — these forfeit the deposit.
Failing to perform on time: not delivering loan documents by the contract date, missing closing date without an approved extension.
Waiving contingencies (in competitive markets some buyers waive inspection or appraisal contingencies to win the offer). Waiving means you'd lose the deposit if those issues arise.
What zipradar shows
EMD is contract-mechanics, not property data. We focus on whether the property is worth the deposit risk: per-zip flood/water/crime/tax data BEFORE you write that check.
Pair /learn/closing-costs-buyer-breakdown/ for the rest of what you'll pay at close.
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