What happens to your money after your offer gets accepted? If you are buying in Columbus or across Franklin County, you will hear a lot about earnest money and how it can make or break a deal. It is normal to wonder how much to put down, when it is refundable, and how to protect it. In this guide, you will learn the local norms, the timelines, and the protections that matter so you can write a strong offer with confidence. Let’s dive in.
What earnest money is
Earnest money is a good‑faith deposit you make when a seller accepts your offer. It shows you are serious and willing to move forward under the terms of the purchase contract. The money is held in escrow and, if you close, it is credited to your down payment and closing costs.
Think of it as a temporary deposit, not an extra fee. Whether it is refundable depends on your contract and the contingencies you include.
How much in Columbus and Franklin County
In Central Ohio, you will commonly see two approaches:
- For many entry‑level or lower‑priced homes, buyers often offer about 1,000 to 5,000 dollars.
- For higher‑priced homes, deposits often range from 1 percent to 3 percent of the purchase price. In very competitive situations, some buyers offer more.
There is no single countywide standard. Your amount should match the price tier, current market conditions, and the strength of the rest of your terms.
What drives the amount
- Price tier. Lower‑priced homes often use a flat number. Higher‑priced homes often use a percentage.
- Market temperature. When inventory is tight, sellers may favor higher deposits. When conditions are balanced, a modest deposit can be sufficient.
- Offer structure. Clean offers or cash may pair with higher deposits. Heavier contingencies might lead you to keep the deposit conservative.
Local practice in Columbus shifts with the season and inventory levels. Many agents advise bumping up earnest money when you need your offer to stand out.
Where your money goes and when it is due
Your contract will name the escrow holder. In Central Ohio, that is often a title company or closing agent. Sometimes a broker’s trust account holds the funds if permitted and agreed to in the contract.
The contract also sets the deposit deadline. In Ohio, it is common to see short deadlines, such as a few business days after acceptance. Always confirm the exact date in your signed agreement.
Best practice: get a receipt that shows the amount, who paid, who holds the funds, and the property address. Ask for the escrow holder’s contact information and any reference number.
If the sale closes, your earnest money appears as a credit on the closing statement.
Contingencies that protect your deposit
Contingencies are your safety nets. Common ones include:
- Inspection contingency
- Financing or mortgage contingency
- Appraisal contingency
- Title contingency
- Sale‑of‑home contingency (less common in competitive markets)
If you terminate within a contingency period using the process in your contract, your earnest money is typically returned.
When refunds typically apply
- You end the deal during the inspection period because the inspection reveals issues you are not willing to accept, and you give proper notice.
- You cannot obtain financing within the financing contingency period, and you terminate on time with proper notice.
- The seller cannot deliver clear title as required.
- The seller materially breaches the contract and you terminate under the contract.
When your deposit may be at risk
- You miss a contingency deadline or terminate for a reason not covered by a contingency.
- You waive protections and then decide not to close without a valid contractual excuse.
- You sign an offer that labels the deposit as non‑refundable.
Contract language to understand
Purchase agreements can include clauses that affect your deposit:
- Liquidated damages. Some contracts give the seller the option to keep the earnest money as a defined remedy if the buyer defaults. The exact wording matters.
- Mutual release requirements. Many escrow holders will not release funds unless both buyer and seller sign a release or a court or arbitrator orders it.
- Escrow instructions. Contracts often tell the escrow holder to keep funds until written direction or a dispute resolution outcome is provided.
Because terms vary, ask your agent to walk you through how your specific contract handles each of these items. If large sums are at stake or the language is unusual, consider consulting an attorney.
Avoiding disputes in Central Ohio
Most earnest money disputes come from missed dates or unclear communication. You can prevent problems with a simple plan:
- Put all contingency deadlines on your calendar and set reminders.
- Complete inspections and loan steps early so you have cushion.
- Do not waive contingencies unless you understand the risk and have a plan with your agent and lender.
- Keep everything in writing. Use the contract forms or written notices your agent provides, and save copies of emails and signatures.
- Confirm who holds escrow and how releases are handled before you deposit funds.
Pro tip for Columbus buyers: use specific dates for contingency removals and send notices in writing to the parties listed in your contract. Documentation is your friend if questions come up.
Real‑world examples
- Example A. You offer 3,000 dollars in earnest money with an inspection contingency. The inspection reveals significant foundation issues. You terminate within the inspection window using the required notice. Your deposit is typically refunded.
- Example B. To compete, you waive the inspection contingency. Later you discover defects and want to cancel. Without a valid contingency, your deposit is likely at risk if you do not close.
- Example C. You include a financing contingency. Your lender denies the loan before the financing deadline. You terminate properly and your deposit is typically returned.
Step‑by‑step checklist for buyers
Before you write an offer:
- Discuss an earnest money amount that fits the property and market conditions.
- Choose your contingency strategy with your agent and lender.
- Confirm who will hold the deposit and the timing stated in the contract.
- Make sure your lender’s timeline for approval and appraisal aligns with your financing contingency dates.
When you deposit funds:
- Deliver funds by the contractual deadline.
- Get a dated receipt that shows amount, payee, and property address.
- Save the escrow holder’s contact details and any reference number.
If you need to terminate:
- Provide written notice before the deadline, following the contract’s instructions.
- Submit any forms the escrow holder needs for a release.
At closing:
- Review your closing statement to confirm your earnest money credit is listed correctly.
Local tips for a stronger offer with less risk
- Right‑size your deposit. Bigger can be better in a tight market, but balance it with the protections you need.
- Consider other ways to strengthen your offer, such as a flexible closing date or clean terms, instead of giving up key protections.
- Choose a reputable title company or escrow holder and ask about their release process up front.
- Keep your agent, lender, and title company aligned on dates and documents to avoid last‑minute surprises.
Ready to buy with confidence in Central Ohio
A smart earnest money strategy helps your offer stand out and keeps your deposit protected. If you want clear guidance that fits Columbus and Franklin County norms, you deserve a local partner who communicates, tracks every date, and negotiates with your goals in mind. Connect with Brad Gregg to plan your offer and move forward with confidence.
FAQs
What is earnest money in a home purchase?
- It is a good‑faith deposit you pay after your offer is accepted, held in escrow and credited to your down payment or closing costs at closing.
How much earnest money should I offer in Columbus?
- Many buyers put 1,000 to 5,000 dollars on entry‑level homes, while higher‑priced homes often see 1 to 3 percent of the price, adjusted for market conditions.
Who holds earnest money in Central Ohio?
- Usually a title company or closing agent named in the contract holds the funds, though a broker’s trust account may be used if permitted.
How fast do I need to deposit after acceptance?
- Your purchase contract sets the deadline, commonly within a few business days in Ohio, so confirm the exact date in your agreement.
When is earnest money refundable for buyers?
- It is typically refundable if you terminate within a valid contingency period using the contract’s notice process, such as inspection, financing, appraisal, or title issues.
What happens if my mortgage financing falls through?
- If you have a financing contingency and you terminate properly before the deadline, your deposit is typically returned.
Can I lose my earnest money if I change my mind?
- Yes, if you do not have a valid contingency or you miss deadlines, you may forfeit the deposit under the contract’s terms.
What is a non‑refundable deposit in a purchase offer?
- It is deposit language that removes refund rights even if you terminate; only agree after you fully understand the risk and strategy with your agent.
How are earnest money disputes handled in Franklin County?
- Many escrow holders require a mutual release or a court or arbitrator decision before they release funds, so clear documentation and proper notice are critical.
