Earnest Money Deposit (EMD)

Earnest Money Deposit

When a buyer places an offer on a home, they do so with an official “Offer To Purchase” Part of the offer and negotiation points may include an Earnest Money deposit. While this can be confused with a due diligence money deposit they are very different items. This episode we are going to explain what “EMD” really is and how it can impact your real estate deal.


Earnest Money is often part of the negotiations and your “EMD” is a big part of that. The deposit is from the buyer and given to an Escrow Agent to hold until closing. The escrow is often an attorney but it could be the firm or one of the agents. 

The EMD shows a good faith effort from the buyer that they are interested in the home and they are not just going around and putting in offers on multiple homes. The EMD demonstrates to the seller that the buyer has some “skin” in the game and is a serious buyer.


The Earnest money is fully refundable up through the end of the Due Diligence period. We talked about this in last weeks episode  so go back and check it if you missed it or need a quick refresher course on the subject. If the buyer backs out after the due diligence period ends, the buyer forfeits their Earnest Money and the money is released to the seller. 

The idea of losing money by the buyer is a big deal for most and as we closer to the end of the due diligence period, a great buyers agent will be sure to do all they can to protect that money for their client.  This may include asking for extensions of the inspection period if there are still uncertain variables or issues with the home.

Likewise a great sellers agent is also going to consider how the Earnest money deposit can affect the deal. The sellers may request an additional earnest monies to extend the deadline or even ask for due diligence money to pay directly to the sellers. This often is needed to assist the sellers with an extra month of unexpected mortgage and utilities while the buyer sorts out additional details of the purchase. 

Welcome Home! 

Chris Whitehurst

Rose & Womble 


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