Before any document or agreement can become a legal and binding contract, for both sides there has to be consideration. Something must be offered as evidence and proof that an agreement is more than just a person’s word to buy. Earnest money is that consideration. The more money you put down, the more you are displaying to the seller that you indeed want to buy his or her home.
How much earnest money is required?
All real estate transactions are individual circumstances and situations and require different approaches. This is one of the many reasons why you want to be professionally represented by Larry Mandel, when it comes time to negotiate a contract. In general, earnest money usually falls within 1% to 5% of the purchase price.