Real Estate Q&A: What is Earnest Money?

A common myth about earnest money in Texas is that it is required. Not true. Most sellers will not agree to an offer without it, but... it is up to them.

Concise and very good comments about the EMD.

Great explanation! Sometimes what we consider simple is complicated to a buyer and seller

Donna, very clearly stated....we don't use it much here though.

Looks like you explained it well Donna and it works for me. Good luck and thanks for the great info.

Great post on a very basic topic.  But something people are always asking about.  It is common to us, but we forget to many it is not.

Great job, Donna, in explaining the Earnest Money!  That is a question that comes up often for me as well!

I've done very few deals in NYC with an earnest money below 10% of the purchase price.  We recently agreed to it on a deal in Brooklyn because the purchaser was willing to deposit 5% ($75,000) before selling their existing home, after which the seller was looking at an LTV of 50.  

I've done deals in other states as well and I've found that high deposits ensure deals get done after offers are made.  I'm all for it.  Buyers are more inclined to be reasonable, and stick to the deal they initially thought was good enough, when they have 10% in escrow (which is often more than $100k on our deals).

Hi Donna, excellent post and explanation.  Too often to us in the trade we assume the genral public is aware of how escrow works.

Good morning Donna, pretty straight forward explanation of the rules and intent around earnest money. Thanks for posting this very useful information. 

Great post!!  My I repost on my personal blog??

Hi Donna,

Good post.

Earnest money is important. On my listings, I will encourage the seller to counter a low earnest money, even if everything else is OK.

Phil