What is an EMD?

An EMD stands for “earnest money deposit.”

When purchasing a home, a buyer’s EMD represents his or her good faith in completing the transaction, making it also known as a “good faith deposit.” This can ensure a seller that a buyer is serious.

If the deal falls through, can I get my EMD back?

It depends. This is typically determined by what is listed on the sales contract. The contract stipulates everything between a seller and a buyer, including the EMD, which is why you should work with a real estate professional to ensure you are protected.

What is the difference among EMDDown Payment, and Closing Costs?

A down payment is used in conjunction with a purchase loan to arrive at the sales price (more loan, less down payment; more down payment, less loan). Closing costs are incurred to purchase a home and receive a loan. An EMD is an upfront deposit that is placed in an escrow account at the beginning of a transaction.

Overall, cash to close is calculated with the following:

+ Closing Costs

+ Down Payment

–  Seller Credits (if applicable)

–  EMD                                                                                   

= Cash to Close