Putting down money before you even own the home can feel risky. You want your offer to stand out, but you also want to protect your cash. If you are buying in Atlanta or Fulton County, understanding earnest money is one of the quickest ways to feel more confident. In this guide, you will learn what earnest money is, how much to offer locally, when it is refundable, and simple steps to keep your deposit safe. Let’s dive in.
Earnest money basics
Earnest money is a good‑faith deposit you offer the seller when you go under contract. It shows you intend to complete the purchase. In Georgia, it is not a legal requirement, but it is customary in most offers.
The money goes into an escrow or trust account and is applied to your purchase at closing. If the sale does not close, what happens next depends on the contract. In some cases, the seller may be allowed to keep the deposit as liquidated damages if you default.
How much to offer in Atlanta
In Metro Atlanta, common earnest money amounts vary by price point and competition:
- Entry‑level homes or new buyers: often $1,000 to $5,000
- Mid‑priced homes: often $2,500 to $10,000
- Higher‑priced homes: often 1% to 2% of the price
For example, on a $350,000 home, a 1% deposit is $3,500. On a $700,000 home, you may see 1% to 2% ($7,000 to $14,000) in competitive situations.
Your strategy should match neighborhood norms, seller expectations, and market conditions. In hot intown areas, larger deposits can help your offer stand out. In less competitive pockets, a modest deposit may be typical. Ask your agent to calibrate the number to your specific target.
Who holds the money
Your contract will name the escrow holder. In Georgia, the funds are commonly held by:
- A brokerage’s trust account
- A closing attorney
- A title company or other agreed escrow agent
The contract also sets the deadline to deliver your deposit. Many Atlanta contracts call for delivery within a few days of acceptance, often 48 to 72 hours, but the exact timing will be stated in your agreement. Always get a written receipt showing the account where funds are held.
Key contract timelines
Your deposit is protected or at risk based on the timelines and contingencies in your contract. Watch these closely:
- Inspection or due‑diligence period: You have a set window to inspect and negotiate. If you cancel as allowed by the contract within this period and give proper notice, you typically get your earnest money back.
- Financing contingency: If your loan is denied before the deadline and you follow the notice rules, your deposit is usually refundable.
- Appraisal contingency: If the appraisal comes in low and the seller will not adjust terms, you may cancel and keep your deposit if your contract includes this protection.
Missing a deadline or failing to give proper notice can put your deposit at risk. Put every date in your calendar on day one.
When you can get it back
You can usually receive a refund of your deposit if any of the following apply and you follow the contract’s notice steps:
- You cancel during the inspection or due‑diligence period
- Your loan is denied before the financing contingency expires
- The appraisal falls short and the appraisal contingency applies
- The seller breaches the contract
If contingencies are removed or expire and you later default, the seller may be entitled to keep the deposit as liquidated damages, or pursue other remedies if allowed by the contract. The contract controls the outcome.
How to keep your deposit safe
Use these best practices to protect your earnest money:
- Preserve contingencies. Keep inspection, financing, and appraisal protections in place as needed, and know their exact deadlines.
- Deliver on time and keep proof. Follow the contract’s instructions and save your wire confirmation, check image, or escrow receipt.
- Verify wiring instructions by phone. Wire fraud is a real risk. Call a trusted number from your agent or closing attorney before sending any funds.
- Choose a neutral escrow holder. For larger deposits, consider a closing attorney or title company named in the contract.
- Consider staged deposits. Negotiate a small initial deposit and a larger second deposit after inspections or loan approval, if that helps you balance risk and competitiveness.
- Understand seller remedies. Ask your agent to explain whether the contract limits the seller to the deposit as liquidated damages or allows other remedies.
- Document everything. Keep inspection reports, lender updates, and any cancellation notices in writing.
Quick buyer checklist
Before you submit an offer:
- Ask what deposit amounts are typical for your target neighborhood and price tier
- Decide on a number that fits your budget and the competition
When you write the offer:
- Specify the deposit amount, who holds it, and the delivery deadline
- Set clear timelines for inspection, financing, and appraisal contingencies
After acceptance:
- Deliver funds by the deadline and get a written receipt
- Schedule inspections immediately and track every contingency date
- Keep your lender on pace to meet the loan commitment date
- Verify any wire instructions by phone before sending money
If problems arise:
- Send written notice exactly as your contract requires
- Seek a mutual release to speed up refund if you cancel validly
- If there is a dispute, your escrow holder may require mutual instructions or court direction
Common scenarios and outcomes
- You cancel during due diligence: Your earnest money is normally returned.
- Your loan is denied before the deadline: With timely notice, your deposit is usually refundable.
- Appraisal comes in low with an appraisal contingency: You can renegotiate or cancel and keep your deposit if the seller will not adjust.
- You cancel after contingencies expire: You risk forfeiting the deposit, and the seller may have other remedies, depending on the contract.
- The seller backs out without cause: You may be entitled to your deposit and other remedies; talk with your agent and, if needed, an attorney.
Atlanta and Fulton County notes
- Closings in Georgia are often handled by attorneys. It is common for a closing attorney to hold earnest money in a trust account.
- Deposit expectations vary by neighborhood. Intown hot spots may see stronger deposits than some outer areas.
- County recording processes do not set earnest money rules. Your purchase contract determines how funds are handled, not county policy.
- Market conditions shift. In a tight seller’s market, a larger deposit can help your offer stand out. Your agent can gauge current competition.
Your next step
A thoughtful earnest money plan can strengthen your offer and safeguard your cash. If you want help matching deposit size to your target neighborhood, setting smart contingencies, and keeping every deadline on track, reach out. As an Atlanta native and process‑driven Realtor, Kelli will walk you through each step and share her buyer checklists, neighborhood insights, and contract timelines.
Have questions about your specific situation? Connect with Kelli Adams to plan your next move with confidence.
FAQs
Is earnest money required in Georgia?
- No. It is not legally required, but it is customary in most offers and strengthens your position with a seller.
How much earnest money is typical in Atlanta?
- Many homes see $1,000 to $10,000; higher‑priced homes often use 1% to 2% of the price. Adjust for neighborhood norms and competition.
Who holds my earnest money deposit?
- A named escrow holder in your contract, often a brokerage trust account, closing attorney, or title company.
When do I pay earnest money?
- Your contract sets the deadline. Many deals call for delivery within a few days of acceptance, often 48 to 72 hours, but always follow the written terms.
Can I get my earnest money back if I cancel?
- Yes if you cancel under valid contract contingencies within the deadlines and give proper written notice as required.
What happens if the appraisal is low?
- If your contract includes an appraisal contingency and the seller will not adjust, you can usually cancel and keep your deposit.
What if my lender denies my loan?
- If denial occurs before the financing contingency deadline and you follow the notice procedure, your deposit is typically refundable.
How do I avoid wire fraud with my deposit?
- Always confirm wiring instructions by phone using a known, trusted number and get a written receipt after funds are sent.
