A deposit from a buyer accompanying an offer for a home purchase.
An Earnest Money Deposit (EMD) or Good Faith Deposit is a deposit from a buyer accompanying an offer for a home purchase. The EMD amount is normally 3% of the purchase price but can vary if specified otherwise in the proposed purchase contract; it will eventually go towards your overall down payment amount due.
The purpose of an earnest money deposit is to prove an offer is serious and in good faith. This money is held in escrow and is typically required within 72 hours of the offer’s acceptance.
The EMD can be a wire, a personal check (in some cases), or a cashier’s check. Like all funds used in a purchase transaction, the EMD must be fully paper-trailed.