Process
Earnest money
A good-faith deposit a buyer puts down when making an offer, held in escrow and applied to the purchase at closing — showing the seller you're serious.
What does earnest money mean?
Earnest money is the deposit that signals a serious offer, typically 1–3% of the price in Michigan, held by a title company or broker in escrow. At closing it's credited toward your down payment and closing costs.
If you back out for a reason covered by a contingency — financing, inspection, appraisal — you generally get it back; if you walk without one, you can forfeit it to the seller.
In competitive markets, a larger earnest deposit can strengthen an offer, but only risk what you could lose if the deal falls apart.
A Michigan example
On a $285,000 offer, a 2% earnest deposit is $5,700, wired to the title company holding it in escrow. It's not an extra cost — at closing it's applied to your down payment and closing costs.
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