The amount of earnest money in a real estate transaction can vary based on factors such as the location, type of property, and the terms of the agreement between the buyer and seller.
However, in most cases, the customary amount of earnest money is around 1% to 3% of the purchase price of the property.
For example, if the purchase price of the property is $300,000, the customary amount of earnest money may be around $3,000 to $9,000.
The earnest money is typically deposited into an escrow account to show the seller that the buyer is serious about the purchase and will be applied towards the down payment or closing costs at the time of the sale.
It’s important to note that the amount of earnest money can be negotiated between the buyer and seller as part of the purchase agreement.
Some buyers may choose to offer a higher amount of earnest money to make their offer more competitive, while others may offer a lower amount to conserve their cash reserves.
Your real estate agent can advise you on the customary amount of earnest money in your local market and help you negotiate the terms of the purchase agreement.