When buying a home, you will likely have to pay a deposit upfront, typically 1-3% of the purchase price. This is called earnest money, and it shows sellers that you’re a serious buyer. But there are certain guidelines to follow when it comes to sourcing earnest money, and we’ve compiled them here.
What Are Acceptable Forms of Earnest Money?
Here’s a chart of what is commonly accepted:
| Payment Method | Description | Commonly Accepted? |
| Personal Check | A check drawn from the buyer’s personal bank account. | Yes (for smaller dollar amounts) |
| Certified Check | A check guaranteed by the issuing bank, funds are verified. | Yes (very secure) |
| Cashier’s Check | Drawn from the bank’s funds, not the buyer’s account directly. | Yes (preferred in high-value deals) |
| Money Order | Prepaid, good for smaller amounts (some restrictions may apply). | Sometimes |
| Wire Transfer | Electronic transfer of funds directly to escrow. | Yes (often used for large deposits or remote transactions) |
What’s Not Accepted for Earnest Money?
These forms of payment are usually not accepted.
| Payment Method | Description | Commonly Accepted? |
| Cash | Difficult to trace, often not allowed due to fraud and security concerns. | No |
| Postdated Checks | Dated for the future; often rejected by escrow agents. | No |
| Credit Cards / Venmo / PayPal | Not secure or traceable in real estate escrow context. Not allowed. | No |
The Takeaway: Preparation Is Key
When buying a home, you’ll want to be prepared to put down an earnest money deposit. Following these guidelines will ensure you know what will likely be accepted and what will not.
This information is for educational purposes only and does not constitute an offer or guarantee of loan.
