What is earnest money and how much should I offer in Wisconsin?
Rob Miller explains what earnest money is, how much Wisconsin buyers typically offer, and when you can and cannot get it back if a deal falls through.
Rob Miller, Branch Manager at MadCity Home Loans, explains earnest money — a mortgage lender's perspective that every buyer needs to hear before they write an offer.
What is earnest money and how much should I offer in Wisconsin?
Earnest money (also called a "good faith deposit") is money you put up when your offer is accepted to show the seller you're serious. It sits in an escrow account held by the title company until closing, at which point it's applied to your down payment or closing costs.
How Much Is Standard in Wisconsin?
In the Madison market, typical earnest money deposits run 1–2% of the purchase price. On a $375,000 home, that's $3,750–$7,500. In competitive multiple-offer situations, buyers sometimes offer more to stand out.
Can You Lose Your Earnest Money?
This is the critical part. Your earnest money is protected as long as you exercise your contingencies:
- Financing contingency: If your loan falls through (and you exercised this contingency), you get your earnest money back.
- Inspection contingency: If the inspection reveals major issues and you walk away, you get it back.
- Appraisal contingency: If the home appraises below the purchase price and you can't renegotiate, you get it back.
If you waive contingencies and then back out of the deal without cause, the seller can keep your earnest money. This is why waiving contingencies in a hot market is a serious decision — talk it through with both your Realtor and your lender.
Related Guide: Understand the full offer and purchase process in our Complete Home Buying Guide.