""Earnest money is a good faith deposit that you pay soon after a seller has accepted your offer on a home," explains Courtney King, Senior Manager of designated brokers at Redfin. "It really demonstrates your intent to buy the home and shows the seller that you're committed to the purchase. It can also act as a safeguard just in case you breach the contract; then the seller might have an opportunity to retain that earnest money.""
""Earnest money differs from the down payment and other closing costs in that it's paid earlier, usually due within 1-3 business days after the seller signs the purchase agreement. To really show sellers you're serious, signing the contract with earnest money in hand is most efficient. But, as it goes with real estate transactions, there's a bit more to the process.""
Earnest money is a good-faith deposit paid shortly after an offer is accepted to demonstrate buyer intent and commitment. The deposit is distinct from the down payment and closing costs because it is paid earlier, commonly within 1–3 business days after contract signing. Payment should be delivered to a neutral third party such as escrow, title, or an attorney. Contracts may include "time is of the essence" clauses that make deposit deadlines binding. Failure to meet the earnest money deadline can give the seller grounds to cancel the contract or retain the deposit.
Read at Redfin | Real Estate Tips for Home Buying, Selling & More
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