What are the do’s and don’ts of offering earnest money in a transaction?

July 25, 2025
by a searcher from Duke University - The Fuqua School of Business in Atlanta, GA, USA
I’m in the process of evaluating a deal and would appreciate insight on how experienced buyers approach earnest money. Specifically:
• When is it appropriate (or not) to offer earnest money in an acquisition?
• What’s a typical or reasonable amount to offer relative to deal size?
• How can earnest money be structured to protect the buyer—e.g., contingencies, escrow terms, refund triggers?
• What are the common pitfalls or risks to avoid when agreeing to earnest money terms?
Would love to hear how others have approached this and what’s considered standard (or smart) in the current market.
from North Central College in Chicago, IL, USA
from Southern Illinois University at Edwardsville in Laramie, WY, USA