What is earnest money and how does making an offer work?

When you make an offer, you submit a written purchase agreement with your price, financing terms, contingencies, and a closing timeline, plus earnest money – a good-faith deposit (often 1–3% of the price) that signals you're serious. The deposit is held by a neutral third party and credited toward your down payment or closing costs at closing. If you back out for a reason allowed by your contingencies, you typically get it back; if you walk away without a valid reason, you can forfeit it. In competitive markets, buyers sometimes offer larger earnest deposits or fewer contingencies to stand out. Don't waive protections you actually need just to win. Know your numbers first using wealthserene.com/tools/home-affordability before you commit to an offer price.