Two big terms you’ll hear a lot are earnest money deposit and down payment. They’re both about plunking down your cold hard cash but in different ways.
Let’s take a look at both of them.
What Is An Earnest Money Deposit?
Earnest money is also called an escrow deposit. When you’ve signed a real estate contract to buy a home, you are required to put a certain amount into an escrow account. This shows the seller you are serious about buying their home.
You can also think of an earnest money deposit as a good faith deposit.
What’s the Typical Amount Placed In Escrow?