What Is Earnest Money, and Do I Get It Back?
October 28, 2026
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What Is Earnest Money, and Do I Get It Back?
Earnest money is a deposit you put down when a seller accepts your offer. It shows the seller you're serious about buying their home. In California, it's often around 1% to 3% of the price, but it can vary.
Where does the money go?
It doesn't go to the seller. It's held by a neutral third party, usually the escrow company, until closing.
Do I lose it?
Not in most cases. At closing, your earnest money usually goes toward your down payment or closing costs. So it's not an extra cost. It's money you were going to spend anyway, just paid early.
You may lose it if you back out of the deal for a reason your contract doesn't cover. That's why contingencies matter. Common ones cover the inspection, the appraisal, and your loan approval. Your real estate agent can explain the ones in your contract.
How should I plan for it?
Have the money ready in your account before you start making offers. It's due soon after your offer is accepted, often within a few days. It also helps to know about programs that may help with upfront costs, like down payment assistance.
Have questions about what to save for? Reach out to our team or connect with me directly. We help buyers all over California plan for every step.
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