How Much Is Earnest Money on a House?
Published by Cash Flow Deals · Last updated 2026-08-05 · Published and reviewed for compliance by Camilo Palacio, a Florida Licensed Realtor
Earnest money is commonly 1% to 3% of the purchase price, though it can run higher in competitive markets. It's a good-faith deposit held by a neutral third party, credited toward the buyer's down payment or closing costs at closing, and it can be forfeited if the buyer breaches the contract outside of an agreed contingency. When you sell with us, you choose between the Fast Cash Offer, where we buy your house as-is and close, and the Premium Cash Offer, where a pre-approved FHA or conventional buyer we already have, ready to go, pays more and buys directly from you. We cover repair costs, and we figure out a way, so nothing comes out of your pocket. With Premium, only what the buyer's lender requires gets fixed, with costs settled from the sale proceeds from our share; with Fast Cash, you make no repairs. For either offer, the number is agreed before any work starts, and it changes only if you agree. The one exception: if something structural surfaces that was not visible or disclosed before we signed — foundation issues, hidden moisture, old wiring, cast-iron drain failure — we re-cost it and bring the number back to you. You decide. You can walk away. We disclose what we know at offer time so this almost never happens.
| Factor | Traditional Route | Cash Flow Deals |
|---|---|---|
| Buyer Commitment Signal | Earnest money deposit, typically 1% to 3% of price, held in escrow | Contract terms are set directly with the company, no separate earnest money process |
| Risk of Buyer Walking | Buyer can often exit under inspection, financing, or appraisal contingencies and recover the deposit | Fewer contingencies tied to a buyer's own mortgage financing or appraisal |
| Dispute Risk | Disagreement over who keeps the deposit is a common source of closing delays | No earnest money dispute process at all |
What Earnest Money Actually Is
It's a good-faith deposit a buyer puts down when a purchase contract is signed, showing they're serious about the deal. It isn't a separate cost, it's later credited toward the buyer's down payment or closing costs.
Typical Earnest Money Amounts
Most contracts land in the 1% to 3% range of the purchase price. Competitive markets or unique properties can push that higher, sometimes into the mid single digits.
Who Holds It, and Where It Goes
The deposit typically sits with a neutral third party, a title company, an escrow company, or a broker's trust account, not the seller directly. That protects both sides until closing.
When a Buyer Can Get It Back
Purchase contracts usually include contingencies, inspection, financing, appraisal, that let the buyer cancel within a set window and recover the deposit in full.
When a Seller Can Keep It
If your buyer breaches the contract outside of an agreed contingency, walking away for no covered reason, you can typically keep the deposit as compensation for the time your house was off the market. Whether you can keep it depends on your contract and the circumstances. With the Premium Cash Offer, if your buyer's loan falls through, that is our problem, not yours, and you can still take the Fast Cash Offer at its own number. That choice does not depend on whether you are entitled to keep the deposit.
Common questions
Is earnest money the same as a down payment?
No. Earnest money is a good-faith deposit paid at contract signing, later credited toward the down payment and closing costs, not separate from it.
Who holds earnest money?
Typically a neutral third party, an escrow or title company, or a broker's trust account, not the seller.
Can a buyer get earnest money back?
Generally yes, if they cancel within an inspection, financing, or appraisal contingency window as written in the contract.
What happens to earnest money if the seller breaches the contract?
It's typically returned to the buyer in full.
Keep reading
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What this means for your options
Understanding the sale process before you commit to a timeline keeps you in control. Nothing is binding until a written contract is signed by both sides; you can take it to an attorney first.
Wait and see
Keep the property as-is and hope conditions improve. The mortgage, insurance, and upkeep keep costing money while you wait, with no set date for things to turn around.
List with a traditional agent
Standard MLS listing, typically 5-6% in commission, and a financed buyer whose deal depends on appraisal, inspection, and lender approval — any of which can fall through after weeks on market.
Sell to Cash Flow Deals
Two offers for your house, Fast Cash or Premium Cash, and you choose. Cash: Cash Flow Deals buys the house as-is and closes. Premium: More money. A pre-approved FHA or conventional buyer we already have buys directly from you.
See your selling options before you decide anything.