Short answerThere is no set amount in Indiana. Earnest money is a good faith deposit stated in your purchase agreement and held by a broker, title company, or other escrow holder. The amount is negotiated; larger deposits can strengthen an offer. Whether you get it back if the deal ends depends on your contract and its contingency deadlines.
Who holds it?
The purchase agreement says who holds it and when it must be deposited. It is usually credited toward your costs at closing.
Can I lose it?
If you end the deal properly under a contingency before its deadline, your contract typically provides for its return. If you back out without a contractual reason, you may forfeit it. Read your contract and ask a real estate attorney with any dispute.
Related: contingencies explained.
Frequently asked questions
Does a bigger deposit help my offer?
It can show commitment, especially against competing offers.
Is earnest money part of my down payment?
It is usually credited to you at closing.
Keep reading
Looking at a house and not sure what you are getting into?
Ask for a free Before You Offer review. Send me the listing. I look over the photos, the seller's disclosure, and recent sales, then flag likely condition issues and planning cost ranges before you write an offer.
Request a Before You Offer reviewOr call or text (812) 525-5489, or email john@yourpropertynegotiator.com.
The Before You Offer review is a REALTOR® and contractor review of the listing, not a home inspection. It is for buyers who are not already working with an agent. If you have an agent, please bring these questions to your agent.
Written by John Long, REALTOR®, 1 Percent Lists Indiana Real Estate. Working contractor who has priced hundreds of home inspection repair requests. Former labor relations negotiator for a major manufacturer and U.S. Coast Guard veteran.
John Long, REALTOR® · 1 Percent Lists Indiana Real Estate · (812) 525-5489 · yourpropertynegotiator.com
This page is general information, not a substitute for a professional home inspection, and not legal, tax, insurance, or lending advice. Ask a real estate attorney about contracts and disclosure, a CPA about taxes, your lender about loan rules, and a licensed inspector or tradesperson about your house. Nothing here guarantees a sale price, net proceeds, repair cost, payment, timeline, appraisal, inspection result, or loan approval. Cost figures are planning estimates, not bids. I own Wardmark Property Operations LLC, a contracting company. You are always free to use any contractor you choose.