When you make an offer on a home you love, the seller will expect you to pay an earnest money deposit. This earnest money will be a percentage of the purchase price, which could add up to many thousands of dollars. But you can forfeit all this money if you don’t close on the home.
As a buyer, there are things you can do to protect your earnest money deposit. Contingencies can be included in the purchase contract that should prevent you from losing money, but which ones do you need and what can safely be left out?
You could also be under pressure from the seller or other buyers to not have contingencies, but is it worth the risk?
If you don’t know much about earnest money, it could end up costing you. We look at the things you need to know about earnest money when buying a home.