What to Know About Earnest Money Deposits

When you make an offer on a home in Canton, you’ll likely be asked for an earnest money deposit. But what is it, and how does it protect both buyers and sellers?

What Is Earnest Money?

Earnest money is a good faith deposit that shows you’re serious about buying. It’s usually held in escrow by the listing brokerage or a title company until closing.

How Much Is Typical in Canton, MI?

• Most buyers put down 1%–3% of the purchase price ($3,000–$10,000 is common for Canton homes).
• The amount is negotiable and depends on local market trends and competitiveness.

What Happens to the Money?

• If you close: The deposit is applied toward your down payment and closing costs.
• If you back out for a valid reason (per contract): You usually get your deposit back.
• If you break the contract with no valid reason: The seller may keep your deposit.

How to Protect Your Earnest Money

• Understand your contingencies—financing, inspection, and appraisal must be clearly outlined.
• Never wire funds without verifying instructions to avoid wire fraud.

Sources:

• National Association of Realtors: Earnest Money
• Michigan Real Estate Contracts

Want to make a winning offer—and keep your money safe? Reach out to The Jason Matt Team for expert guidance on every step!

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