Earnest money is a good faith payment made by a potential purchaser to a seller to show he or she is serious about purchasing the property. If your offer is accepted, your earnest money becomes part of your down payment. Earnest money is due at the time you make an offer, or within a couple days after your offer is accepted. In Washington, DC, a successful offer typically includes an earnest money deposit of at least 5% of the purchase price, but sellers may accept as low as 3%. Offering more earnest money shows the sellers that you are very serious about buying their home, and since your earnest money becomes part of your down payment, a high earnest money amount is a no-cost way to make your offer stand out among competing offers.
If the seller does not accept your offer, you get your earnest money back. You can also get your earnest money back if certain conditions are met during your inspection period or if you are turned down for a loan during your financing contingency period. Over the next couple weeks, I will be talking more about these contingencies in detail, so stayed tuned. And as always, if you have any further questions, do not hesitate to give me a call at 202-838-SELL, or contact me using the forms on this site.