When you're searching for a new home, you're probably thinking about what you need right now: enough bedrooms, the right kitchen, a good backyard, or maybe a shorter commute. But there's another
Understanding Earnest Money When Buying a Home
Dated: August 12 2026
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When making an offer on a home, you may hear your Realtor mention an earnest money deposit. If you're a first-time buyer, understanding what earnest money is and how it works can help you feel more confident when it's time to submit an offer.
Earnest money is a deposit made by the buyer to demonstrate that they're serious about purchasing the property. The amount can vary depending on the transaction, local market, and terms of the offer. The funds are typically held by a designated third party according to the purchase agreement rather than being paid directly to the seller.
If the transaction moves forward successfully, the earnest money is generally credited toward the buyer's costs at closing. However, what happens to the deposit if the transaction doesn't close depends on the terms and contingencies contained in the contract.
This is why buyers should understand important deadlines involving financing, inspections, appraisals, and other contractual requirements. Missing a deadline or terminating a contract outside of an allowed contingency could potentially put the earnest money at risk.
An experienced Realtor can explain how earnest money works in your local market, help you understand your contract, and keep track of important deadlines throughout the transaction. Knowing what to expect before submitting an offer can help protect your interests and make the homebuying process much smoother.
Stephannie Wilson
Stephannie Wilson, Managing Broker/Owner of NextHome Wilson Real Estate Services, has called Southern Indiana home for over 40 years. Married to a successful builder for three decades, she brings deep....
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The data relating to real estate for sale on this web site comes in part from the Internet Data Exchange Program of Metro Search, Inc. Real estate listings held by brokerage firms other than NextHome Wilson Real Estate Services are marked with the Internet Data Exchange logo or the Internet Data Exchange thumbnail logo and detailed information about each listing includes the name of the listing broker.
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MIBOR REALTOR® Association All information deemed reliable but not guaranteed. All properties are subject to prior sale, change or withdrawal. Neither listing broker(s) or information provider(s) shall be responsible for any typographical errors, misinformation, misprints and shall be held totally harmless. Listing(s) information is provided for consumer's personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. The data relating to real estate for sale on this website comes in part from the Internet Data Exchange program of the Multiple Listing Service. Real estate listings held by brokerage firms other than NextHome Wilson Real Estate Services may be marked with the Internet Data Exchange logo and detailed information about those properties will include the name of the listing broker(s) when required by the MLS. Copyright ©2026 All rights reserved.
Last Updated: September 25, 2026 5:05 AM UTC
The data relating to real estate for sale on this web site comes in part from the Internet Data Exchange Program. Real estate listings held by IDX Brokerage firms other than NextHome Wilson Real Estate Services are marked with the Internet Data Exchange logo or the Internet Data Exchange thumbnail logo and detailed information about them includes the name of the listing IDX Brokers. This information is provided exclusively for personal, non-commercial use and may not be used for any purpose other
IDX information is provided exclusively for consumers personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Data is deemed reliable but is not guaranteed accurate by the MLS. IDX information is provided by the Indiana Regional MLS.
Information last updated on September 25, 2026 5:05 AM UTC
Heart of Kentucky Association of REALTORS® All information deemed reliable but not guaranteed. All properties are subject to prior sale, change or withdrawal. Neither listing broker(s) or information provider(s) shall be responsible for any typographical errors, misinformation, misprints and shall be held totally harmless. Listing(s) information is provided for consumer's personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may
