Earnest Money Deposit Calculator

Earnest money signals serious offer; varies 1–10% by market.

Purchase price

Earnest %

Competitiveness adjust %

Earnest money

$10,000

Total upfront commitment

$10,000

At-risk amount (post-contingency)

$10,000

How the math works

Earnest = price × (base % + competitiveness adjust).

$500k × 2% = $10,000 earnest money.

How to Use

Enter purchase price.
Enter earnest %.
Enter competitiveness adjust %.
Read earnest money.

Frequently Asked Questions

Earnest money rules?

Standard amount: 1–3% of purchase price typical, 5–10% in competitive markets. Held in escrow (escrow company, attorney trust, title company). Refundable contingencies: financing, inspection, appraisal contingency typically protect buyer. Forfeit if buyer defaults outside contingency periods. Refundable to buyer if seller breach. Released to seller credits at closing. Liquidated damages clause: caps seller's claim to earnest money in some states (CA, FL, TX). Increase to seller signal: bigger deposit + shorter contingencies.

How does this affect deal economics?

Transaction economics — closing costs, escrow holdbacks, post-close true-ups, broker comp, title savings — directly reduce buyer or seller proceeds. Often 1–4% of deal value cumulatively. Allocate deliberately in PSA negotiation. Reps and warranties insurance (RWI) becoming standard for $20M+ transactions to backstop indemnification.

Standard market practice?

Major markets follow ALTA closing protocols. Buyer typically pays: lender title, recording fees, half escrow, half conveyance tax (varies). Seller pays: owner's title, broker comp, half escrow. Mortgage recording tax (NY, FL): substantial. Transfer tax (CT, DE, NJ, PA): 1–4%. Allocations negotiable but standard market practice limits negotiation leverage.

Risk allocation?

Holdbacks and escrows backstop seller indemnities for representations and warranties. Standard: 1–2% of purchase price for 12–18 months. Larger for: leasing risk, environmental, litigation, tenant credit. RWI shifts indemnity to insurer (1–4% of policy limit premium). Use earnouts for performance risk on operating businesses or stabilizing assets.