Earnest money deposits signal commitment in competitive markets, but you can minimize them for casual purchases or when the seller already knows you. Size your deposit based on competition level, how much you want the home, and your relationship with the seller.
What's my advice? It really depends on whether you're competing against another buyer or not, how bad you want the property, and whether you know the seller or not. If you are competing against other buyers, my advice is to put a good chunk down for your earnest money deposit because again, it signals your commitment. You have skin in the game, so to speak. If this home is more of a stop-off point and/or you could kind of take it or leave it type of a thing, then I'd recommend putting as little or nothing down in earnest money as possible for you to reduce your risk. If you know the seller well and the seller trusts you, an earnest money deposit may not be necessary. But if you don't know the seller, remember, the earnest money deposit is one of the first impressions that the seller is going to get of you.
