In general, the larger the amount of earnest money, the more serious the
seller will consider your offer. Therefore, the more you offer for earnest money
the more attractive your offer will be to the seller. Keep in mind that by putting down a small amount of earnest money will often raise red flags in the mind of the seller.
The amount you’ll pay for the earnest money deposit will depend on different factors, such as the current
real estate market, a seller's having multiple offers for their property, and what the seller requires. On average, you can expect to offer the following earnest money deposit amounts:
- $1,000 as earnest
money for a resale property.
- 1 percent of the purchase price for luxury homes.
- 2% through 3% for newly construction homes.
- $5,000 for a property you are buying through an auction.
- 10 percent of the purchase price when offering a cash deal for a bank-owned property.