An earnest money deposit (EMD), sometimes referred to a “good faith deposit”, is the initial funds that a buyer is asked to put down once a seller accepts the buyer’s offer. It shows not only that the buyer is serious about buying, but that they are also willing to put their money where their mouth is.

The amount of the EMD can vary between 1 to 5 percent of the sales price. The EMD is often held by an escrow company.