Earnest money is a deposit made to a seller indicating the buyer's good faith in a protentional purchase. Generally we recommend the earnest money to be 1% of the sales price. The earnest money allows the buyer additional time when seeking financing. Earnest money is typically held by the seller or buyer in a trust or escrow account. Earnest money is also known as a good faith money. When submitting earnest money, it shows the seller that you’re a serious buyer and you are committed to the purchase.
The great thing is, the sellers don’t get to just pocket this money! The funds are deposited into an escrow account. This can be either held by the brokerage or attorney’s office. The earnest money will be used towards your down payment and closing cost
Bethesda Realty Group