Bob Ramalho

Berkshire Hathaway - Verani Realty

  • Home
  • About
  • Info
    • First Time Seller Tips
    • First Time Buyer Tips
  • Reviews
  • Blog
  • Search for Properties
  • Contact

Bob Ramalho October 1, 2025

What Every Buyer Needs to Know About Earnest Money Deposits

When buying a home, understanding the role of an earnest money deposit can make the difference between a smooth transaction and unnecessary stress. Earnest money shows a seller that you are serious about purchasing their property, and it often plays a key role in negotiating and securing your dream home. Knowing how it works, how much to offer, and what can happen to your deposit is essential for any buyer.

What Is an Earnest Money Deposit
An earnest money deposit is a sum of money provided by the buyer when making an offer on a home. It demonstrates good faith and commitment to the purchase. The deposit is typically held in an escrow account until closing, at which point it is applied toward the down payment or closing costs.

How Much to Offer
The amount of earnest money varies depending on the local real estate market and the property price. In competitive markets, buyers may offer a higher deposit to make their offer stand out. However, it is important to balance the deposit with your comfort level, as you want to demonstrate seriousness without overextending financially.

What Happens to Your Deposit
If the deal closes successfully, your earnest money is credited toward your purchase. If the transaction falls through due to contingencies, such as a failed inspection or financing issues, the deposit is usually refunded. Conversely, if a buyer backs out without a valid reason, the seller may keep the deposit as compensation for lost time and opportunities.

Tips for Protecting Your Earnest Money
To safeguard your deposit, always include contingencies in your offer that allow you to withdraw under certain circumstances. Work with a trusted real estate agent and a reputable escrow company to ensure proper handling. Understanding the terms of the contract and communicating clearly with your agent can prevent disputes and ensure that your deposit is protected.

Earnest money deposits are a critical part of the home buying process. By understanding how they work, how much to offer, and how to protect your investment, buyers can demonstrate commitment, strengthen their offers, and navigate the transaction confidently.

Filed Under: Home Buying Tips Tagged With: Earnest Money, Home Buying Tips, Real Estate Advice

Berkshire Hathaway Logo

Connect with Me!

How can I help?


0 / 180

Looking For Something?

Recent Articles

  • How to Read and Understand Your Home Purchase Agreement
  • What Every Buyer Needs to Know About Earnest Money Deposits
  • What’s Ahead For Mortgage Rates This Week – September 29th, 2025
  • What Is More Important, the Home or the Neighborhood?
  • How to Tell If a Seller Is Desperate to Sell and Use It to Your Advantage
  • Turning Tiny Homes into Big Opportunities
©2024 BHH Affiliates, LLC. An independently owned and operated franchisee of BHH Affiliates, LLC. Berkshire Hathaway HomeServices and the Berkshire Hathaway HomeServices symbol are registered service marks of Columbia Insurance Company, a Berkshire Hathaway affiliate. Equal Housing Opportunity.

 

Equal Housing Opportunity

Our Location

Berkshire Hathaway HomeServices Verani Realty
One Verani Way
Londonderry, NH 03053

Return to top of page

Copyright © 2025 Bob Ramalho. All rights reserved.   Log In