Worried about losing your earnest money when you make an offer in Columbus? You are not alone. Your deposit is a real chunk of cash, and you want to know exactly what it covers and how to protect it. In this guide, you will learn what earnest money is, common amounts in Franklin County, how contingencies work, and how to structure your terms so your deposit stays safe. Let’s dive in.
Earnest money basics
What it is and why it matters
Earnest money is a deposit you pay with your offer to show the seller you are serious. If the sale closes, that deposit is credited toward your down payment and closing costs. It also gives the seller some protection if you default. If you back out without the protection of a contingency or you breach the contract, the seller may have the right to keep the deposit, depending on the agreement.
Who holds the deposit
In Central Ohio, earnest money is usually held in a neutral escrow or trust account. That can be a title or settlement company, the listing broker’s trust account, or another escrow agent named in the contract. Your purchase agreement should name the escrow holder and explain how and when funds are released.
Typical amounts in Columbus
How much to offer
There is no Ohio statute that sets a fixed amount. In the Columbus and Franklin County market, common practice looks like this:
- Low‑competition or lower‑price homes: $500 to $2,000 is often used as a token deposit.
- Typical mainstream offers: a flat $1,000 to $5,000, or about 1% of the purchase price. For example, a $300,000 home often sees a $3,000 deposit.
- Competitive or higher‑value listings: 2% to 3% of the price, or a larger flat amount, can help your offer stand out.
- New construction or luxury: builders and luxury sellers may require larger or staged deposits.
Market conditions shift. In a hot, low‑inventory market, larger deposits are common. In a slower market, smaller deposits may be accepted. Talk with your agent for current norms and consider your comfort level if the deposit were at risk.
When it is due
Your offer will spell out when the deposit is due. In Columbus, it is commonly delivered with the offer or within 24 to 72 hours after both sides sign. If you do not deposit on time, the seller may have remedies or could treat the offer as void. Confirm the exact deadline before you submit.
Contingencies that protect your deposit
Contingencies are conditions in your contract that let you cancel and receive your earnest money back if certain things do not go as planned. To keep your protection, you must follow the deadlines and notice rules in the contract.
Inspection
An inspection contingency gives you a set period, often 5 to 14 days, to complete inspections and decide how to proceed. If you cancel within that window and give the required written notice, your earnest money is typically refunded per the contract.
Financing and appraisal
A financing contingency protects you if your lender does not approve the loan by the deadline. An appraisal contingency protects you if the appraised value comes in below the purchase price and you cannot reach new terms. If you timely notify the seller under these clauses, your earnest money should be refunded as the contract describes.
Title and home sale clauses
A title contingency lets you review the title. If defects are not cured within the contract timeframe, you can cancel and receive your deposit back. A home sale contingency makes your purchase dependent on the sale of your current home. These are less attractive to sellers and carry strict timelines, so they must be drafted carefully to preserve your protections.
Structure your offer to stay safe
Set smart timelines
- Inspection period: 7 to 10 days is a workable target in many cases. That lets you schedule inspections and negotiate repairs.
- Financing deadline: align with your lender’s process, often 21 to 30 days. Build in time for underwriting.
- Appraisal clause: include clear options if value comes in low. Spell out whether you will renegotiate or cancel with a refund.
- Title review: set a short review window and require the seller to cure defects within a specific number of days.
Choose clear escrow terms
Name the escrow agent and list how funds are released at closing or upon cancellation. Include instructions for what happens if either side claims default, and whether mediation or arbitration applies. Details help prevent delays.
Example concepts you might see in a contract:
- “Earnest money of $X to be deposited with [named title/escrow company] within 48 hours of mutual acceptance.”
- “Buyer to have an inspection period of X days; buyer may terminate and receive refund of earnest money by delivering written notice within that period.”
- “Financing contingency shall expire on day X; if the lender denies financing and buyer timely notifies seller, earnest money shall be refunded.”
Avoid accidental waiver
Missing a deadline or failing to send notice in the correct form can accidentally waive your protection. Track every date on your calendar. Send notices in writing and on time. Keep proof of delivery in case there is a dispute.
Alternatives and staged deposits
In some cases, buyers structure deposits in stages. You might start with a smaller amount and add more after inspections or financing milestones. If you use staged deposits, the contract must spell out the amounts and dates. Nonrefundable fees are less common in Ohio, but if they are used, the contract must clearly state they are nonrefundable and how they will be credited at closing.
For strategy tips tailored to current competition, see our guide to a winning Columbus offer strategy.
Real Columbus scenarios
- Scenario A: Your inspection finds major issues and you cancel within the inspection window. Outcome: your earnest money is refunded because you acted within the contingency and sent proper notice.
- Scenario B: The appraisal is low and you cannot bridge the gap. Outcome: if your appraisal or financing contingency is in place and you notify the seller on time, your deposit is refunded.
- Scenario C: You miss a contingency deadline or forget to send termination in writing. Outcome: you may lose the right to a refund and the seller could keep the deposit as liquidated damages, depending on the contract.
- Scenario D: You refuse to close without invoking a contingency. Outcome: you likely forfeit earnest money and could face other remedies under the contract.
- Scenario E: The seller cannot deliver clear title or does not close. Outcome: you are generally entitled to your deposit back and may have other remedies as described in the agreement.
Quick buyer checklist
Use this checklist to protect your deposit on a Columbus home:
- Ask your agent what deposit size is customary for the price point today.
- Confirm who will hold the funds and the exact deposit deadline.
- Set clear contingency windows: inspection, financing, appraisal, and title.
- Put all deadlines on your calendar and send notices on time and in writing.
- If competing, weigh a larger deposit against strong contingency protections.
- If unsure about language, consult your agent or an attorney before you sign.
Handling disputes and releases
If there is a disagreement about who gets the earnest money, the escrow holder will keep the funds until the parties sign mutual instructions or the dispute is resolved under the contract terms. Many escrow agreements include steps for mediation, arbitration, or court if needed. Listing the release instructions and dispute process in your contract helps avoid long delays.
Ready to plan your offer?
A smart earnest money strategy shows confidence without taking on unnecessary risk. The right deposit size, clear contingency windows, and tight deadline management can make your offer competitive and keep your funds protected.
If you are preparing to buy in Columbus or the surrounding suburbs, let’s map out your numbers, timelines, and protections together. Schedule a Columbus buyer consultation to get a step‑by‑step plan for your next offer. Prefer to start with a quick conversation? Connect with the Shoaf Team through Unknown Company and we will help you move forward with confidence.
FAQs
How much earnest money is typical in Columbus?
- Many buyers offer $1,000 to $5,000 or about 1% of the price. In competitive situations, 2% to 3% is common. Ask your agent for today’s norms by neighborhood and price point.
Do I have to pay earnest money with my offer in Ohio?
- Often you pay with the offer or within 24 to 72 hours after acceptance. Your contract will specify the deadline. Missing it can give the seller remedies.
Will I get my earnest money back after a bad inspection?
- Usually yes, if you cancel within the inspection window and follow the contract’s notice rules. Act before the deadline and keep proof of notice.
What if my loan is denied in Columbus?
- If you have a financing contingency and you notify the seller by the deadline, your earnest money is typically refundable. Without that protection, your deposit may be at risk.
Who holds earnest money in Central Ohio?
- A neutral escrow holder, such as a title company or the listing broker’s trust account, usually holds the funds. The contract should name the holder and release procedures.
What happens if the seller and I disagree about releasing funds?
- The escrow agent will hold the money until you both sign a release or follow the contract’s dispute process, which may include mediation, arbitration, or court.
