Earnest money, also known as a good faith deposit, is a sum of money provided by a buyer to demonstrate their serious intention to purchase a property. It is typically given during the negotiation phase of a real estate transaction and held in an escrow account. The amount of earnest money varies but is often a percentage of the property's purchase price. If the transaction successfully closes, the earnest money is applied toward the down payment or closing costs. However, if the buyer fails to fulfill the terms of the agreement, the seller may be entitled to keep the earnest money as compensation for their time and effort. Conversely, if the seller fails to meet the terms of the agreement, the earnest money is usually returned to the buyer.