Yes. In New York City it definitely is. Now, you can negotiate giving less prior to the contract signing, but you need to give earnest money. With the market situation these days, and such I can see a seller's attorney being a little stiff about the contract money. It is also typically a substantial amount. This shows that you won't walk away. There should be verbiage in your contract which outlines specific cases where if you cancel the contract you will get your money back, an example maybe a 30 day mortgage contingency, if you can't get a mortgage commitment in 30 days, and you can prove you attempted with several banks, you may have an out. TALK TO YOUR ATTORNEY.
Also, you say "full down-payment" well are you buying 20% down? if so, it is a bit much, 5-10% should be enough earnest money. If you are buying the home with less than 10% down and the seller is asking for it at contract, it is normal due to the low financial risk on your end.
The good news though, this is held in escrow by the sellers attorney. Meaning, it won't be spent. Your attorney should advise you accordingly as well. I HIGHLY recommend a Real Estate Attorney, not a friend, or a contract attorney, etc. you need a Real Estate attorney because they are well-versed to the norms in the industry and won't mess up your deal.