Earnest money is a deposit a buyer submits along with an offer to demonstrate serious intent to purchase. In North Carolina, it's typically held in a trust account by the listing broker or closing attorney until closing, at which point it's credited toward the buyer's down payment and closing costs. It's a distinct concept from due diligence money, which is a separate, non-refundable payment made directly to the seller under NC contracts. There's no fixed legal minimum, but earnest money in North Carolina commonly runs around 1% of the purchase price, though this varies based on market conditions and how competitive the offer needs to be. In a competitive multiple-offer situation, buyers sometimes increase earnest money as a way to strengthen their offer and signal financial seriousness to the seller, similar to how due diligence money is used. Earnest money is generally refundable to the buyer under specific circumstances outlined in the contract — most commonly if the buyer terminates during the due diligence period (though the due diligence fee itself is forfeited in that case) or if a contingency like financing isn't met and is properly documented. If a buyer breaches the contract outside of these protected circumstances, the earnest money can be forfeited to the seller. Because earnest money and due diligence money serve different purposes and have different refund conditions under NC contracts, it's worth understanding both clearly before submitting an offer, rather than assuming they work the same way. A buyer's agent should walk through exactly what's refundable and under what conditions before the offer is submitted, since these terms are negotiated as part of the contract itself.