Earnest Money and Escrow

[Richard Frazier]

Hello everyone! I am brand new to the real estate community and I am slowly but surely wrapping my head around the intricacies of wholesaling, flipping, and renting. However, I can’t seem to find enough information (or at the very least a dumbed down explanation) of earnest money and escrow accounts. My understanding is that if I attempt to put a property under contract, I would need to essentially put down a small fee (varying) in order to show that I am serious. This fee is then given to my attorney and put into escrow (third party account). 1. If I’m dealing with cheap houses, and sellers who most likely do not have an attorney, do I need to deal with earnest money at all? 2. Should I put down some random amount such as $1 or does it need to be a percentage? 3. What exactly does the earnest money go towards after the deal is closed? Does it help pay for attorney fees/title search? Any help would be greatly appreciated!