Avalanche Real Estate
Please let me know if you have any more questions.
Sears Real Estate
However: Don't pay more than 3.5% in earnest money. That's not wise.
As already noted, the amount of earnest money is negotiable. On top of that, the customary percentage varies geographically. In some cases, it's more likely to be a set figure, like $2,000. Other times, it's more likely to be a percentage of the purchase price, such as 1%. The whole idea of an earnest money deposit is to show that you're serious, and to put that money at risk if you don't perform according to the agreement. But you ought to be looking at something roughly in those ranges . . . not 4%, 5%, or more.
Talk to YOUR Realtor (not the listing agent) and determine what a reasonable earnest money deposit would be for your area. Then offer that. If the seller wants a lot more (like 4%-5%), ask yourself if you really want all that risk.
Hope that helps.
Earnest money amounts are negotiable in most cases. If you are buying new construction, they may require additional deposits for upgrades or changes to the plan for a home currently under construction.
If your earnest money is greater than the down payment required, and you have the funds available to use, anything above the down payment could be applied toward closing costs, prepaids or refunded to you. You are also able to use more than 3.5% down payment if you choose, that is just the minimum required, not the maximum.