What is Earnest Money?

We get this question frequently from first time home buyers, what is earnest money? Earnest money is an important part of the home buying process. It is a money deposit that shows the sellers you are a committed buyer to the sale. Usually you put a deposit down of 1%-5% of the home purchase price, depending on the price. The money goes to the title company, where they “hold” the earnest money deposit and this money can either go towards the purchase price or be refunded to the buyer once the sale closes.