Earnest Money is the money that is put down to show your seriousness about buying a home. It must be large enough to indicate good faith and usually hovers around 1 – 5 % of the purchase price. If your offer is accepted by the seller, then the earnest money becomes part of your downpayment or closing costs. If the offer is rejected then the money is returned to you. If you back out of a deal, you will have to forfeit the entire amount.
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