Earnest Money Calculator

Calculate typical earnest money deposits for any state. See deposit deadlines, who holds funds, and state-specific requirements.

Enter Transaction Details

Purchase Price

Enter the total purchase price of the property

State

Select the state where the property is located

Typical Earnest Money for Texas

$4,000 - $12,000

1% - 3% of purchase price

Texas Requirements

Deposit Deadline

3 days to deposit

Held By

Title company

Note

If deadline falls on weekend/holiday, extends to next business day

Skip the math. DocJacket extracts earnest money from contracts automatically.

Upload any purchase contract and our AI extracts the earnest money amount, deposit deadline, and escrow holder in seconds.

Start Free

How Earnest Money Works

Earnest money, also called a good faith deposit, shows the seller you're serious about purchasing their property. The deposit is typically held in escrow until closing, where it's applied toward your down payment or closing costs.

Key Factors That Affect Earnest Money

1.Market conditions: In competitive markets, buyers often offer higher earnest money to make their offer more attractive.
2.Purchase price: Higher-priced homes typically require larger earnest money deposits.
3.State requirements: Some states have specific rules about who can hold earnest money and when it must be deposited.
4.Property type: Luxury properties and investment properties may require higher deposits.

Protecting Your Earnest Money

Your earnest money is protected by contingencies in your purchase contract. Common contingencies include inspection, financing, and appraisal contingencies. If a contingency isn't met and you cancel within the allowed timeframe, you typically get your earnest money back.

Earnest Money: Frequently Asked Questions

What Is Earnest Money When Buying a House?

Earnest money is a good-faith deposit you make when submitting an offer on a home. It shows the seller you are serious about purchasing their property. The deposit is held by a neutral third party — typically a title company, escrow agent, or attorney — until closing, when it is applied toward your down payment or closing costs.

How Much Earnest Money Is Required?

Most states require 1–3% of the purchase price as earnest money, but amounts vary significantly by location. New York typically requires 3–10%, New Jersey 5–10%, and Massachusetts around 5%. In Texas, Georgia, Florida, Colorado, California, and Illinois, 1–3% is standard. In competitive markets, buyers often offer more to strengthen their position.

How to Calculate Your Earnest Money Deposit

Multiply the home's purchase price by your state's typical earnest money percentage (usually 1–3%). For a $400,000 home at 2%, you would deposit $8,000. Use our free calculator above to get an instant state-specific range, deposit deadline, and details on who holds the funds.

Does Earnest Money Go Towards Your Down Payment?

Yes. At closing, your full earnest money deposit is credited toward your down payment. For example, if your down payment is $50,000 and you deposited $8,000 in earnest money, you only need to bring $42,000 to the closing table.

Does Earnest Money Go Towards Closing Costs?

Earnest money is first applied to your down payment. If your deposit exceeds the required down payment, the remainder is applied to closing costs. In transactions where no down payment is required (such as VA loans), the entire deposit may go toward closing costs.

Is Earnest Money Refundable?

Earnest money is refundable if you cancel during an active contingency period — such as a home inspection, financing, or appraisal contingency. If you back out after all contingencies have expired or without a valid contractual reason, the seller may keep the deposit as liquidated damages.

Earnest Money vs Due Diligence

Earnest money is a refundable deposit held in escrow until closing. Due diligence fees — common in states like North Carolina — are non-refundable payments made directly to the seller for the right to inspect and evaluate the property. You can lose your due diligence fee even if the deal falls through, whereas earnest money is typically protected by contingencies.

Earnest Money vs Escrow

Earnest money is the deposit itself — the funds you put up as a good-faith commitment. Escrow is the neutral account or arrangement where those funds are held by a third party (title company, escrow agent, or attorney) until the transaction closes. Your earnest money goes into escrow; escrow is not a separate payment.

Complete Earnest Money Calculator Guide for 2026

This free earnest money calculator helps home buyers, real estate agents, and transaction coordinators quickly calculate typical earnest money deposits for any U.S. state. Get instant calculations showing deposit amounts, deadlines, and who holds the funds for all 50 states plus Washington DC.

Understanding Earnest Money Deposits

Earnest money, also called a good faith deposit, demonstrates to the seller that you are serious about purchasing their property. The deposit is typically held in escrow until closing, where it is applied toward your down payment or closing costs. Without earnest money, sellers may not take your offer seriously, especially in competitive markets.

Earnest Money Calculator: How It Works

Our earnest money calculator uses state-specific data to show you the typical deposit range for your purchase. Simply enter the purchase price and select your state to see: the typical earnest money range in dollars and percentages, the deposit deadline, who typically holds the funds (title company, escrow agent, or attorney), whether your state is an attorney state, and any state-specific notes or requirements.

Earnest Money by State: Complete Guide

Earnest money requirements vary significantly by state. Most states see typical deposits of 1-3% of the purchase price, but some states have notably different practices.

High Deposit States

New York typically requires 3-10% earnest money, with 10% being standard in NYC and luxury markets. New Jersey commonly sees 5-10% deposits with a two-step deposit process where buyers make an initial deposit followed by a larger one. Massachusetts often sees 5% deposits with a unique two-stage process involving an offer deposit and a Purchase and Sale Agreement deposit.

Standard Deposit States

Most states including Texas, California, Florida, Colorado, Arizona, and others typically see earnest money deposits of 1-3% of the purchase price. In competitive markets within these states, buyers may offer higher deposits to strengthen their offers.

Attorney States for Real Estate

Attorney states require or customarily use attorneys for real estate closings. These include: Connecticut, Delaware, Georgia, Kentucky, Massachusetts, New Hampshire, New Jersey, New York, South Carolina, and West Virginia. In these states, attorneys often hold earnest money deposits and oversee the entire closing process. North Carolina is a partial attorney state where non-attorneys can handle closings in some cases.

State-Specific Deposit Deadlines

Most states require earnest money to be deposited within 1-3 business days after contract execution. Notable exceptions include: Texas requires deposit within 3 days of the effective date (extends to next business day if deadline falls on weekend/holiday), California requires deposit within 3 business days of acceptance (with 3% maximum risk by law), Florida requires deposit within 3 business days with 30-60 day escrow periods being typical.

Who Holds Earnest Money?

The party holding earnest money varies by state. In most states, a title company or escrow agent holds the deposit. In attorney states, the closing attorney typically holds the funds. Ohio requires the real estate broker to hold earnest money. Washington state requires an escrow company. Illinois allows brokers, attorneys, or title companies.

Protecting Your Earnest Money

Your earnest money is protected by contingencies in your purchase contract. Common contingencies include: home inspection contingency (allows you to cancel if significant issues are found), financing contingency (protects you if your loan falls through), appraisal contingency (allows cancellation if the home appraises below purchase price), and title contingency (protects against title issues). If a contingency is not met and you cancel within the allowed timeframe, you typically get your earnest money back in full.

Earnest Money vs Down Payment

Earnest money and down payment are different but related. Earnest money (1-3% typically) is paid when you sign the purchase contract to show good faith. The down payment (3-20% depending on loan type) is the larger amount paid at closing. At closing, your earnest money is credited toward your down payment, reducing the amount you need to bring to the closing table.

What Happens to Earnest Money at Closing?

At closing, the escrow holder releases your earnest money and applies it toward your purchase. It typically goes toward your down payment first, then any remaining amount is applied to closing costs. For example, on a $400,000 home with $10,000 earnest money, 20% down payment ($80,000), and $8,000 closing costs, your earnest money reduces what you owe at closing by $10,000.

Common Earnest Money Questions

How much earnest money for a $400,000 house?

For a $400,000 house, typical earnest money ranges from $4,000 to $12,000 (1-3%) in most states. In New York, expect $12,000 to $40,000 (3-10%). In New Jersey, expect $20,000 to $40,000 (5-10%).

Can you lose earnest money?

Yes, you can lose earnest money if you back out of the contract without a valid contingency. To protect your deposit, ensure your contract includes appropriate contingencies and meet all deadlines specified in your contract.

Is earnest money refundable?

Earnest money is refundable if you cancel within an active contingency period or if the seller breaches the contract. It is typically not refundable if you simply change your mind after contingencies expire.