Not sure how much earnest money to offer in Columbus? You’re not alone. This good‑faith deposit can help your offer stand out, but it also needs the right protections so you don’t put your money at risk. In this guide, you’ll learn exactly what earnest money is, how it works in Franklin County, typical amounts, and the steps to keep your funds safe. Let’s dive in.
What earnest money is
Earnest money is a good‑faith deposit that shows you are serious about buying a home. It is paid soon after your offer is accepted and is held in a neutral escrow account. At closing, it is typically credited toward your down payment and closing costs. If the deal falls through for a contract‑approved reason, you usually get it back.
How it works in Columbus and Franklin County
Who holds your deposit
In most Columbus‑area transactions, a title or escrow company holds your earnest money in a dedicated trust account. In some cases, a real estate brokerage trust account or a seller’s attorney may hold it. Your purchase contract should name the escrow holder and explain how the funds will be handled.
When and how you deliver funds
Most purchase agreements here require you to deliver the deposit within a set window after both parties sign the contract. The deadline is often 24 to 72 hours, but it is negotiable. You can usually pay by personal check, cashier’s check, or wire transfer. Always request written confirmation of receipt that shows the date, amount, and who is holding the funds.
Typical amounts in Columbus
There is no one-size number, and it varies by price point and market conditions. Many Columbus buyers use a flat amount between $1,000 and $5,000 for modest‑priced homes. Offering 1 to 2 percent of the purchase price is also common for mid‑priced homes. In more competitive situations, buyers sometimes increase the deposit to strengthen the offer.
Contract terms that protect you
Your contract should clearly spell out where the deposit is held, when it’s due, and how it will be credited at closing. It should also tie your deposit to specific contingencies that make it refundable. Common protections include inspections, financing, appraisal, clear title, and a sale‑of‑home contingency if needed. Make sure the contract states how to give notice and by what deadlines you must act.
Contingencies and your refund
- Inspection contingency: If you cancel within the inspection period due to unsatisfactory results, your deposit is typically refundable.
- Financing contingency: If your lender declines financing by the deadline, you should be able to recover your funds.
- Appraisal contingency: If the appraisal comes in low and you cannot reach new terms, you can usually withdraw and get your deposit back.
- Title contingency: Unresolved title problems can allow a refund.
- Sale‑of‑home contingency: If included and not met, the contract can end with a return of funds.
Waiving contingencies can help in a bidding war, but it increases the risk of losing your deposit if you later back out without a contract‑approved reason.
Refunds, forfeiture, and disputes in Ohio
If you cancel within the contract rules and deadlines, the escrow holder typically returns your earnest money. If you back out without a permitted reason, the seller may claim the deposit as liquidated damages or pursue other remedies, depending on the contract and Ohio law. If there’s a disagreement, the escrow holder may require a signed mutual release or ask a court to decide. Your contract may also call for mediation or arbitration.
Smart strategy for Columbus buyers
Before you write an offer
Talk with your Columbus buyer’s agent about customary deposit amounts for your price range and neighborhood. Ask about current competitiveness so you can calibrate your deposit size. Decide if you want to strengthen your offer with a larger deposit while keeping key protections.
Protections to include
- Name the escrow holder and deposit deadline.
- Use clear contingency language with dates and notice steps.
- Require a written receipt when funds are deposited.
- State that funds are credited to you at closing.
A simple example you can discuss with your agent: “Earnest money shall be refundable if Buyer terminates before the stated deadlines due to unsatisfactory inspection, lender denial, or appraisal below the purchase price that Seller will not remedy.”
Steps when you deposit funds
- Verify the escrow holder’s identity before sending any money.
- Keep copies of your check or wire confirmation.
- Get written confirmation from the escrow holder that shows the date, amount, and account where funds are held.
Wire fraud safety
Real estate wire fraud is a real risk. Protect yourself with a few simple habits:
- Do not rely on email alone for wiring instructions. Confirm by phone using a known, publicly listed number for the title or escrow company.
- Treat any last‑minute changes to wiring instructions as a red flag and verify by phone.
- Re‑confirm account details immediately before you send funds.
- Ask the escrow company about their anti‑fraud procedures and follow their guidance.
If problems arise
If your contingency allows cancellation and you terminate properly, request a prompt release of your deposit in writing. If the seller disputes the release, ask for a mutual release. Your escrow holder may require a signed release or a court order. Consult your buyer’s agent and consider contacting a real estate attorney for next steps.
At closing
Your earnest money appears as a credit on your Closing Disclosure or HUD‑1. Review the final accounting before you sign so everything matches your expectations.
Quick Columbus earnest money checklist
- Talk with your agent about typical deposit ranges for your target area and price.
- Choose a deposit strategy that fits market conditions and your risk tolerance.
- Name the escrow holder and set a clear deposit deadline in the contract.
- Include inspection, financing, appraisal, and title protections with firm dates.
- Get a written receipt for your deposit.
- Follow strict wire‑fraud verification if wiring funds.
- Track contingency deadlines and give any notices in writing.
- If terminating under a contingency, request a written mutual release promptly.
- Confirm your earnest money credit on the closing statement.
Buying in Central Ohio should feel confident, not confusing. With a clear plan for your earnest money, you can write a competitive offer while keeping smart safeguards in place. If you’d like a friendly, step‑by‑step approach from search to closing, reach out to Unknown Company for local guidance you can trust.
FAQs
How much earnest money should a Columbus buyer offer?
- Common approaches include flat amounts between $1,000 and $5,000 for modest‑priced homes or 1 to 2 percent of the purchase price for many mid‑priced homes. Competitive situations may call for more.
Who typically holds earnest money in Franklin County?
- Most deposits are held by a title or escrow company. Sometimes a brokerage trust account or an attorney holds it. Your contract should name the holder.
When is earnest money due after my offer is accepted?
- Many Columbus contracts require delivery within 24 to 72 hours of mutual acceptance, though the timeframe is negotiable.
When is earnest money refundable to a buyer?
- If you cancel within the contract’s contingency rules and deadlines for inspections, financing, appraisal, or title, the deposit is typically returned.
Can a seller keep my earnest money if I back out?
- If you withdraw without a contract‑approved reason, the seller may claim the deposit as liquidated damages or seek other remedies based on the contract and Ohio law.
How can I avoid wire fraud when sending my deposit?
- Always verify wiring instructions by phone using a trusted number for the escrow company, and treat any last‑minute changes as a red flag.
Will my earnest money show on my closing documents?
- Yes. It appears as a credit on your Closing Disclosure or HUD‑1 and is applied to your down payment and closing costs.
