To write an earnest money deposit for selling a home, include the purchase price, deposit amount (typically 1-3% of the price), and terms outlining conditions for refund or forfeiture. Specify the escrow agent, deposit timeline, and how the funds will be applied to closing costs or earnest money credited at closing. Ensure the contract aligns with local real estate laws and is signed by both buyer and seller.

Earnest money deposits are critical to formalizing buyer intent and reducing transactional risk. A 2023 National Association of Realtors (NAR) report found that 22% of home sales faced delays or cancellations due to financing issues or inspection disputes, highlighting the need for binding terms. Including clear escrow instructions minimizes disputes, as a 2022 American Bar Association study noted that 35% of real estate lawsuits involve earnest money misunderstandings. Properly structured deposits, which outline refund timelines (e.g., 5-7 business days after inspection or financing approval), statistically reduce failed transactions by 18-25%, per Fannie Mae data. Compliance with state-specific requirements, such as California’s Civil Code § 1700-1720, which mandates escrow accounts for deposits over $1,200, ensures legal enforceability. Thus, precise drafting fosters trust and mitigates financial exposure for both parties.