When buying a home in Greenville or the surrounding Upstate South Carolina area, you’ll likely hear the term earnest money deposit. This is a standard part of most real estate transactions and shows the seller you’re serious about purchasing their property.
What Is Earnest Money?
Earnest money is similar to a security deposit. Buyers usually put down between 1% and 5% of the purchase price as earnest money when making an offer. This money is held in an escrow account until closing.
How Is Earnest Money Used?
At closing, your earnest money isn’t an extra fee—it’s applied as a credit toward your purchase. Think of it as money you’ve already invested in the home that reduces your final closing costs.
What Happens If the Sale Doesn’t Close?
Sometimes, transactions don’t make it to the closing table. In those situations, there are two main ways earnest money can be returned to the buyer:
-
Mutual Agreement – Both the buyer and seller must agree in writing on how the funds should be disbursed.
-
Court Ruling – If the parties cannot agree, a judge may decide how the earnest money is released.
This is why it’s important to fully understand the contingencies in your contract—such as inspection or financing—because they play a big role in whether you’ll get your earnest money back.
Why Earnest Money Matters
For sellers, earnest money offers reassurance that the buyer is committed. For buyers, it strengthens your offer and shows you’re serious, especially in competitive markets like Greenville, Simpsonville, and Five Forks.
If you’re preparing to buy a home in the Upstate, working with a local realtor can help you navigate earnest money deposits with confidence and protect your investment throughout the process.
