Video — Will You Need Earnest Money To Buy A Home?

As this video explains, cash committed to demonstrate sincere intent to go through with a detail is called "earnest money."

Conditions and (sometimes) local customs may play a role, but an earnest money sum between 1% and 5% of the purchase price is typical. This is regarded as substantial enough to demonstrate good-faith intent.

If agreement is reached through offer and counter-offer, the earnest money generally becomes part of the down payment or transaction closing costs.

If agreement is not reached, earnest money is returned. If you back out of the offer/deal, you may forfeit the earnest money.

Ask your real estate professional for guidance.