When is earnest money typically submitted in the home buying process?

In the home buying process, earnest money is typically submitted at the time of making an offer on the property. This practice serves several important purposes. First, earnest money demonstrates the buyer's serious intent to purchase the home. By providing this monetary commitment upfront, the buyer assures the seller that they are genuinely interested in completing the transaction, which can give the seller confidence in negotiating and accepting the offer.

Additionally, earnest money acts as a form of security for the seller. In the event that the buyer decides to withdraw from the agreement without a valid reason, the seller may be entitled to keep the earnest money as compensation for taking the property off the market. This advance payment thus plays a critical role in establishing a trust-based relationship between buyers and sellers right from the outset of the home buying process.

In contrast, submitting earnest money after a home inspection, during the closing process, or once the mortgage is approved does not align with standard practices, as it is essential to provide this deposit upfront to formalize the offer.