I may have been confusing the two actually, since the downpayment was due at contract signing, not closing and I was thinking it may have been earnest money. My bad billybob, I believe Wes' answer to be more accurate although I've heard much higher numbers than 1 to 2% for earnest money in westchester area.

I can see that EMD ( earnest money deposits ) are done differently everywhere. Here in Michigan, EMD is typically 1% to 2 % of the purchase price with a minimum of $1,000.

EMD is NOT the down payment on the property ... it's the good faith deposit. 1% is very normal here with 2% being very generous. The Buyers Broker holds the EMD funds in escrow at least until the offer is accepted, then it MAY be transferred to the listing broker if required by the purchase agreement.

The EMD can be used toward the down payment or in any other way that funds may need to be directed during the closing. They can be directed toward the closing costs, down payment, or even refunded to the buyer if there are seller concessions to cover closing costs and no other funds are required from the buyer.

I have often seen the EMD or at least a portion of them go back to the buyer at closing.

When we purchased our co-op it was. Also, it was an interest bearing account which the seller received the interest. We were told this was odd, usually the buyer receives the interest, but considering it was like 2 month of interest, we didn't care much.

Is it usual for the sellers attorney to hold the money in an escrow account?

The minimum earnest money (or down payment) should be decided by your mortgage loan officer...what can you afford and still get a mortgage. There is no "norm."

Put the most down at contract signing that you can so the seller will no your are invested in purchasing the property.