Real Estate Q&A: What is Earnest Money?

Reblogger Gene Riemenschneider
Real Estate Broker/Owner with Home Point Real Estate DRE # 01492725

Buying a Home in Brentwood Ca

There are a lot of details about Buying a Home. Here is a post that explains the security deposit.

For more information on Buying a Home in Brentwood or beyond give me a call at 925-260-4321.

Original content by Donna Foerster

Real Estate Q&A: What is Earnest Money?Real Estate Q&A


The seller asks the buyer for Earnest Money to demonstrate a serious intent to purchase the property.  Earnest Money is typically 1% of the purchase price, however in homes priced over $500,000 Earnest Money could be as much as 2-3% of the purchase price.

Earnest Money compensates the seller if the buyer is in default of the contract, or if the buyer walks away from the purchase of the property.

As long as the buyer acts in good faith and works within the deadlines of the contract, the earnest money is protected and can be returned to the buyer if the deal cannot move forward.  The Earnest Money will also be treated as a credit to the buyers’ down payment or closing costs upon purchase of the property.

The Contract to Buy and Sell Real Estate (in Colorado) specifies how the Earnest Money will be treated as part of the Real Estate transaction.

If you have Real Estate Questions, The Foerster Team has the Answers.  Please call us at (720) 530-5554, email us at or leave your question in the comments below.  Who knows? Your question might be the topic of a future blog post!


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Donna Foerster

The Foerster Team

Rocky Mountain Real Estate Advisors

720-530-5554 (cell)

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