Earnest money, also known as hand money, is a deposit made by a buyer to demonstrate their seriousness and commitment when entering into a real estate transaction. It signifies to the seller that the buyer is earnest about purchasing the property and willing to commit financially upfront.

Typically held in an escrow account, earnest money is later applied towards the buyer’s down payment or closing costs at the time of closing. The amount usually ranges from 1% to 3% of the purchase price, depending on local practices and negotiations.

If you’re navigating a real estate transaction and have questions about earnest money or need assistance with your purchase, contact us now at Delaney@TheHighlandCompanyRE.com. As real estate professionals, we can provide expert guidance and ensure you understand how earnest money factors into your buying process.