ear·nest 1 adj.
Idiom: in earnest
1. With a purposeful or sincere intent. 2. Serious; determined.ear·nest 2 n.
1. Money paid in advance as part payment to bind a contract or bargain.
2. A token of something to come; a promise or an assurance.
(Not to be confused with THIS Ernest!)
There seems to be a lot of confusion these days about Earnest Money, even among those who have previously purchased a home. As many States may differ as to what is considered a normative practice for providing Earnest Money, it's good to know ahead of time what to expect in your particular market area.
To find out all you need to know about Earnest Money, take a hop over to SOUNDBITEBLOG (opens up into a 
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another quality article from Sparky at SOUNDBITEBLOG 
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This is great info for buyer's. Some are under the impression that they need not put anything down and need not pay any closing costs as well when they are doing a 100% financing....so it takes a good agent to spell it out for them!
I run into the folks that believe they not only will need no cash, that the seller will pay them to take their home. That is because that is what they are being told by their amateur friends and get rich quick TV shows.
In Hawaii the custom is a $1000 earnest money check with the offer. I have seen $500, but that is considered really weak. I have also seen more where they want to impress the seller.
Good informative post Rich. Great graphics to clarifiy your article. I always thought Ernest was great!
I just had this discussion with a buyer that handed me an offer. He was going to give $1000 but I told him $2000 would look better. This is a short sale and he really want the house. Now the funny thing is: his offer for the house is kinda low in my book but I will submit it and see what the bank counters back or if they will even give it the time of day. This is the only offer we have had on this property so turning down the offer is not an option for the seller. Short sales are so heckic anyways but its better than the bank just taking the house. My fingers are crossed on this one. Although it is a CASH DEAL.
I do run into people that do not want to put down a dime and they ask about all the down payment assistant programs and what is the seller willing to credit back or carry. But I don't blame them for trying to get the most for their buck.
Awesome post....killer Earnest picture (RIP). Too often buyers want to skate by with offering what they see as the minimum....if you can swing it- the more the better----unless, of course, you're not earnest.
RIP Jim Varney... do you remember when he was the spokesperson for Convenient Food Stores? The franchise was actually Convenient Food Stores... his face was all over their 32oz cups and I remember having tons of them growing up...
btw... on topic... in Florida, earnest money MUST be deposited in escrow within 24 hrs of full execution and the effective date... otherwise the contract is null and void. You would not believe how many realtors fail to even collect a check!
Love this! And you :) You're the best Rich! Your customers must really feel the same way.
Rich, I was talking to a new Realtor the other day and another Realtor in his office told him that he needed to get 20% in earnest money from his Buyer. I don't think I have ever seen anyone put that kind of money down on a contract, even if they are going to end up making a 20% downpayment. I told him what I usually see on contracts, and hopefully he will not scare away his Buyers by asking them for 20% in earnest money every time.
Well, my buyer had no problem with the $2K but I bet if I had told him 20% he would have walked away from the table -- and I would have no sale. I think my buyer would be walking away smiling, saying to himself "this lady did not know what she was doing and I am glad there will be no deal!"