NYC Affordability

Also called earnest money or a contract deposit, the good faith deposit is what a NYC buyer wires — typically to the seller’s attorney’s escrow account, not the seller directly — at the moment both sides sign the contract of sale, well before closing. It’s customarily 10% of the purchase price; while technically negotiable, sellers rarely accept meaningfully less, since the deposit is what makes the contract binding and gives the seller recourse if the buyer walks away without a valid reason.

It’s easy to conflate with the down payment, but they serve different purposes: the deposit demonstrates the buyer is serious enough to have real money on the line the moment they sign, while the down payment (typically 20% or more at most co-op and condo buildings) demonstrates financial strength to the lender and board. In practice, the good faith deposit becomes part of the down payment — the buyer simply wires the remaining balance at closing.

Worked example

On a $900,000 contract, the customary 10% good faith deposit is $90,000, wired to escrow at signing. If the buyer is putting 20% down overall ($180,000), the remaining $90,000 balance is due at closing. See NYC closing costs for buyers for what else is due at that final closing.