This is the price you are willing to pay for the home.  Don't just guess at this number as if you offer too much the home will not appraise and if you offer too little, you'll run the risk of insulting the seller.  Your real estate agent should provide you with comparable properties as well as trends to where the market is headed.  From that, you can determine what to offer on the house.
 

Earnest Money and Option Money are funds deposited at the time of contract and are either applied to the sales price at closing or released to either the seller upon termination of the contract.  Option Money is very differnt from Earnest Money. 

Earnest Money is deposited with either your real estate broker or closing attorney at the time of contract.  Depending on circumstances, earnest money can be refunded to the buyer if the closing does not occur and it is no fault of the buyer. 

Option Money is paid directly to the seller at the time of contract and is non-refundable.  The benefit to Option Money is that, as a buyer, you have the right to cancel the contract during the option period without fault or future obligation.  Essentially you're buying time. 

There's not a set amount required at the time of contract so it can be negotiated at the time of contract.  In our experience, since Earnest Money is viewed as "good faith" money by the seller, an offer with a larger Earnest Money deposit is taken more seriously than smaller amounts.
 

Most sellers will want to know whether you, as the buyer, are qualified to purchase their home before deciding on your contract.  Therefore, included with your offer will be an approval letter from a reputable lender.  During that approval process, the lender will state the terms proposed for the financing you have been approved for.
 

Once under contract, you will be requesting time from the seller to complete a series of home inspections.  This is on your dime and needs to be figured into the closing costs / cash on hand needed to close.  You should estimate that a basic home inspection will run around $400 - $500.  If you choose to have radon and mold testing performed, the inspection costs can double. 

The inspector is paid up front and the inspection fees are non-refundable if the sale of the home falls through.
 

Items that are free-standing or otherwise not included with the home.  This includes the washer, dryer, and refrigerator.

 

Items attached to the home in an "permanent manner" that are ordinarily included with the sale but are not.  This includes curtain rods, plasma tv mounts (but not the tv), in-wall speakers, light fixtures, blinds, etc.

 

The date you intend to take possession on the home.

 

Item or action that must be completed prior to the close date to make the sale occur.