Earnest money is simply an initial deposit that is specified in the contract, usually much less than your entire down payment. If your home purchase closes, the earnest money deposit that you originally made will be applied towards your down payment. So how much earnest money should you put down? The amount of earnest money will vary depending on the market. There is no set amount, but usually it equates to 1%-3% of the purchase price of the home. In some cases however, there are times in which an escrow deposit of $1,000 will do, it all depends on the seller. An Earnest Money Agreement is a great way for a potential buyer or renter of real estate to show that he or she is serious about purchasing or renting. In a way, it's a lot like a security deposit. Generally, both parties will sign an Earnest Money Agreement and then the potential buyer will deposit a certain sum of money.