Earnest money is an amount paid in to escrow early in the home purchase process to essentially put a “hold” on the property for the buyer. The money is deposited once an offer has been accepted. It’s a way of showing serious intent that the buyer is going to stay true to their offer, and protects sellers from having to deal with buyers putting out multiple offers or going into negotiations on multiple properties. At closing, the earnest money payment is generally taken out of escrow and put toward the buyer’s down payment.
A REALTOR®, title company, or an attorney can usually hold this deposit. The amount varies from community to community, and it becomes part of your down payment.