Earnest Money Calculator

Earnest money is usually 1 to 3 percent of the purchase price. On a $400,000 home that is $4,000 to $12,000, held in escrow and credited toward the buyer’s down payment and closing costs at closing. Competitive markets can push deposits higher; local custom sets the norm.

Updated 2026. Researched guidance, not legal, tax or financial advice.

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Competitive markets typically require higher earnest money

Earnest Money Tips

  • • In hot markets, 2-3% earnest money is common
  • • Cash offers often include higher earnest money
  • • Always use a reputable escrow company
  • • Verify earnest money terms in the contract
  • • Consider contingencies that protect earnest money

Regional Standards

Standard Markets

1-2% typical

High-Cost Areas

2-3% common

Competitive Markets

3-5% for strong offers

Cash Offers

Often 5%+ to show strength

Earnest money by price

Typical deposits at 1, 2 and 3 percent. Check local custom with your broker, since some markets use flat amounts.

Earnest money deposit examples
Purchase price1%2%3%
$200,000$2,000$4,000$6,000
$300,000$3,000$6,000$9,000
$400,000$4,000$8,000$12,000
$500,000$5,000$10,000$15,000
$750,000$7,500$15,000$22,500

Next, estimate the rest of the cash to close with the closing cost estimator.

Frequently asked questions

How much earnest money should a buyer put down?

Most buyers deposit 1 to 3 percent of the purchase price, so $3,000 to $9,000 on a $300,000 home. In a multiple-offer situation a larger deposit signals commitment and can strengthen an offer. The amount is negotiable and is written into the purchase contract along with the deadline to deliver it.

Who holds the earnest money?

A neutral third party, usually the title company, escrow company or the listing brokerage’s trust account, as named in the contract. The money sits there until closing, when it is credited to the buyer, or until the parties agree in writing how to release it if the deal falls through.

Do you get earnest money back if the deal falls through?

Usually, if the buyer cancels under a contingency in the contract, such as inspection, financing or appraisal, within its deadline. A buyer who backs out for a reason the contract does not allow, or after a contingency has expired, can lose the deposit to the seller. Read the contingency dates closely.

Sources: Consumer Financial Protection Bureau guidance on earnest money and closing, and standard state purchase contract terms. Researched guidance, not legal advice.