How much earnest money is typical
It varies by market and price. Amounts of roughly 1% to 3% of the price are common, and some contracts use a flat amount. A larger deposit can make an offer stronger in a competitive market. Your agent will know what's usual for the area.
Who holds it and how to pay
The title company or the brokerage named in the contract holds it in an escrow account. It's usually paid by wire, cashier's check or personal check. Credit cards generally aren't accepted. Confirm wiring instructions by phone before sending anything.
When you get earnest money back
If the deal falls through for a reason covered by a contingency in your contract, such as inspection, financing or appraisal, the deposit is normally returned. If a buyer walks away without a contractual reason, the seller may be entitled to keep it. Release usually needs both parties to sign.
Common questions
Is $500 earnest money good?
It depends on the price and the market. On most homes it's on the low side, which can make an offer less competitive.
Is 10% earnest money normal?
It's high for most residential purchases, though it can strengthen an offer.
Can I pay earnest money with a credit card?
Generally no. Escrow accounts take wires and checks.
Do you get earnest money back at closing?
It's credited toward your down payment and closing costs, so it reduces what you bring.