Earnest money is the standard good faith deposit paid by the buyer to the seller after offer acceptance. This amount is generally 1%-3% of the sale price and will later be applied toward their down payment or closing costs. If a buyer backs out of the sale due to a failed contingency (e.g., inspection report), they can recover their earnest money in full. If a buyer backs out of the sale for reasons not covered by contingencies, they will forfeit their earnest money. For more information, check out earnest money explained.
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