When buying a home, would you consider asking the sellers to "hold" their home off the market without offering to give them a deposit? As a seller, would you take your home "off the market" for purchasers who were unwilling to give you a sum of money as a deposit?
In both cases, the answer is probably "No!" A very important message is communicated from buyer to seller by the so-called "earnest money deposit." It is understandably common for homebuyers to want to offer as small a deposit as possible when signing an agreement to purchase a home, and just as common for the sellers to want as large a sum as possible to be placed on deposit.
Here's why the amount offered can be so important. For the buyers, one way to impress the sellers with their sincerity is by offering a higher than normal deposit. That's why it's called earnest money! Their willingness to go beyond the minimum requirements, especially with a newly listed property or in a multiple offer situation, is a positive indicator that they plan to complete the purchase on time and as agreed.
From the sellers' point of view, a solid offer to purchase from buyers - when accompanied by a substantial deposit - can quickly become an attractive offer, one which is easy to accept. Of course other terms are just as important, such as type of financing and downpayment, but a large deposit into escrow can speak volumes as to the intent of the buyers.
In a nutshell, a larger than expected earnest money deposit can yield a positive return for both homebuyers and sellers!