Earnest Money Deposit(EMD)-what is this money for?

This is the money a buyer gives to the seller when you make an offer to buy a home. This shows the seller you are serious about your offer and you’re willing to put your money where your mouth is. This money will be held in an escrow account. The amount of earnest money deposit (EMD) required can be dictated by the listing or if you’re up against competition, you can make your offer stronger by increasing the amount of earnest money. There is no set amount required for EMD.

What happens to the money?

Your earnest money payment gets credited toward your down payment at closing. For example, if you write a $8,000 check for earnest money deposit(EMD), that will then roll over to cover your down payment and closing costs.

Unfortunately, earnest money can be forfeited to the seller if you do not follow the terms of the contract or if you miss a deadline. Your agent should help keep you on schedule with your dates and deadlines, but as a buyer you want to make sure you’re on top of them as well. I advice buyers to put important dates into the calendar and set alerts for the day before to make sure you stay on top of all you need to do.