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What is a good faith deposit?
A good faith deposit is a sum of money that you place into escrow showing the seller you have some skin in the game. It’s typically refundable if you cancel your contract under a contingency. If you breach the contract, it could be at risk.
Your good faith deposit is basically telling the seller that you are serious about making the deal. A customary standard is that a buyer should put 3% of the purchase price in escrow as a good faith deposit. Generally, you really don’t need to put more than that, but if you want your offer taken seriously, you’ll want to avoid putting an extra low deposit. Keep in mind that your good faith deposit is typically safe if you follow your contractual obligations, but make sure you read your contract in detail to educate yourself as to how to keep it safe. It’s a good idea to familiarize yourself with the contract and you can find a sample of one here in the learning center.