How Much Should You Put Down in an Earnest Money Deposit?

Published On: August 6th, 2019|Categories: Blog, Buying|Tags: Buying a Home, Deposit, Earnest Money|

When you find a home for sale in Aspen that you love and you’re ready to buy, your real estate agent will tell you it’s time to come up with an earnest money deposit.
But how much are you supposed to give the seller, and what happens to the cash?

How Much Should You Put Down in an Earnest Money Deposit?

A standard earnest money deposit is between 1 and 3 percent of the home’s sales price.
That seems steep, especially if you’re looking at a $400,000 (or more) home. But in reality, it’s a measure of good faith. You’re using it to show the seller that you’re really serious about buying the house, because he or she is going to have to take it off the market for you – that means nobody else is going to come see it or make another offer, so if your deal falls through, the seller is out of luck.
Your real estate agent will let you know how much you should put down in earnest money, though – every transaction is different.

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What Happens to Earnest Money?

Your earnest money deposit goes into an escrow account until the deal closes. That means the seller doesn’t actually get it – it’s just a gesture of good faith that shows the seller you’re really willing to buy the home (and that you’re worth taking the home off the market).

Are You Selling a Home in Aspen?

If you’re ready to sell your home in Aspen, Woody Creek, Basalt, Carbondale or Snowmass, we may be able to help you.
Get in touch with us right now to find out how much your home is worth – and discover how we’ll be able to help you sell it quickly and for top dollar.
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