Sometimes referred to as, Good Faith Deposit. This is your deposit on the property so the seller can take the house off the market while you perform “due diligence” (get you financing done, the inspection etc.) Most common today is a 2% of the purchase price. If a home is $350,000, then you may be asked for a $7,000 E.M.D., or deposit. The deposit is deducted from the sale price. Buying a home is serious business. Therefore, buyers should know that if they do not follow thru with their commitment to buy a property, (aside from previously agreed contingency’s) they risk losing part or all their deposit.
