Earnest money is put down to demonstrate your seriousness about buying a home. It must be substantial enough to demonstarte good faith and is typically a small percentage of the purchase price and can vary depending on local market conditions, the price of the property, and the type of the property. If your offer is accepted, the earnest money becomes part of you down payment, or closing costs. If the offer is rejected, your money is returned to you. If you back out of a deal, you may forfeit the entire amount. The money will usually be kept in non-interest bearing escrow account set up by the real estate broker whom you and the seller agree to.

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