Earnest money in Georgia: how much, who holds it, and when you get it back
Earnest money shows a seller you are serious. In Georgia, the due diligence period decides how much of it is actually at risk.
What earnest money is
Earnest money is a deposit you make after your offer is accepted, held in trust until closing. At closing it is credited toward your down payment and closing costs. It is your money the whole time — the question is under what conditions you could lose it.
There is no legal minimum in Georgia. The amount is whatever buyer and seller agree to in the contract, and it varies with the price, the market and how competitive the home is.
Who holds it
The contract names the holder — usually the buyer's or seller's brokerage, or the closing attorney's firm. A brokerage holding earnest money must keep it in a trust (escrow) account under Georgia real estate law. The contract also states how and when you must deliver it, typically within a few days of the binding agreement date. Missing that deadline can give the seller the right to terminate, so treat it as firm.
Never wire earnest money based only on an email. Call the holder at a number you found independently to confirm instructions. See wire fraud in real estate.
How due diligence protects it
Georgia purchase agreements commonly include a due diligence period — a set number of days during which you can terminate the contract for any reason or no reason. If you terminate properly, in writing, before the period ends, you are generally entitled to your earnest money back.
After the due diligence period ends, you can usually only terminate without losing earnest money if the contract gives you another right — for example, a financing or appraisal contingency, or the seller failing to perform. Otherwise, walking away puts the earnest money at risk. See the due diligence period guide.
Non-refundable money and competitive offers
To strengthen an offer, some Georgia buyers agree that part of their deposit becomes non-refundable — paid to the seller as consideration for the due diligence period, or made non-refundable after a certain date. That is a negotiated term, not a standard fee. If you agree to it, understand exactly when that money stops being refundable and whether it is credited toward the price at closing.
A larger earnest money deposit with a short due diligence period is another common way to compete. See tips to win a multiple-offer situation.
When things go wrong
If the buyer and seller disagree about who gets the earnest money, the holder generally cannot simply pick a side. Georgia contracts set out a process: the holder may disburse on written agreement of both parties, may notify both parties of a proposed disbursement and give them time to object, or may file an interpleader action and let a court decide. Disputes take time, which is another reason to keep every termination notice in writing and on time.
How much to put down
- Match the market: ask your agent what has been typical on recent accepted offers in that neighborhood and price range.
- Keep it liquid: earnest money must come from documented funds your lender can source.
- Remember it counts toward closing: a larger deposit is not extra money, it is cash to close paid early.
- Weigh the risk: the deposit is only at risk after the due diligence period, when you should already know the house.
A timeline of your earnest money
- Binding agreement date — the contract is signed by both sides and delivered. The earnest money clock starts.
- Delivery deadline — you deliver the deposit to the holder by the method and date in the contract. Get a receipt.
- Due diligence period — inspections, quotes, insurance, HOA documents. Terminate in writing before it ends if you need to, and the money is generally refundable.
- After due diligence — the deposit is protected only by any remaining contingencies and the seller's obligations.
- Closing — the holder sends the funds to the closing attorney, and the amount appears as a credit to you on the settlement statement.
Questions to ask before you sign
- Who is the holder, and how do I deliver the funds?
- How many days do I have to deliver it?
- When exactly does the due diligence period end — date and time?
- Is any part of this deposit non-refundable, and from when?
- If I terminate, how quickly is it returned and to which account?
Common questions
How much earnest money is typical in Georgia?
There is no required amount. It is negotiated in each contract and varies with price and competition. Ask your agent what accepted offers in that area have included recently.
Do I get my earnest money back if I back out in Georgia?
Generally yes if you terminate in writing during the due diligence period. After it ends, you are protected only by any other contract rights, such as a financing or appraisal contingency.
Who holds earnest money in Georgia?
Whoever the contract names as holder — usually a brokerage or the closing attorney. Brokerages must keep it in a trust account.
Is earnest money applied to my down payment?
Yes. At closing the earnest money is credited to you on the settlement statement, reducing the cash you bring.
What happens to earnest money if the appraisal is low?
It depends on your contract. Without an appraisal contingency and after due diligence has ended, a low appraisal alone may not let you terminate without risking the deposit. See the appraisal gap guide.
Read next
General information for Georgia home buyers, not legal, tax or lending advice. Loan programs, rates, limits, tax rates and insurance terms are set by lenders, agencies, counties and insurers and change — confirm current figures with them, and have your closing attorney review anything you sign.