Earnest Money in Ohio: New Albany Buyer Basics

Is earnest money making you second-guess your offer? You are not alone. In New Albany and across Franklin County, this good-faith deposit can help you win the home you love, but only if you understand how it works and how to protect it. In this guide, you will learn how much to put down, who holds it, when it is refundable, and the timelines that matter in Ohio. Let’s dive in.

What earnest money means in Ohio

Earnest money is a buyer’s good-faith deposit that accompanies your purchase offer. It signals to the seller that you are serious and gives them confidence to take the home off the market. If the sale closes, the deposit is applied to your purchase price or closing costs.

There is no single Ohio statute that defines earnest money. Your rights come from the purchase agreement and general Ohio contract law. That is why clear terms in your contract are essential.

Typical amounts in New Albany

There is no fixed amount, but many buyers use either a flat dollar figure or a percentage of the price. Typical ranges for many transactions are $1,000 to $5,000 or about 1 to 3 percent of the purchase price. In competitive or higher-priced situations, you may offer a larger deposit to strengthen your position.

The right amount depends on market conditions, your financing strength, and seller expectations. Your agent will help you match the deposit to the home and the level of competition.

Who holds your deposit

Your contract will name the escrow holder and where funds will be deposited. In Ohio, title companies and closing attorneys commonly handle escrow for closings. Real estate brokerages may also hold deposits in a trust account, depending on what the contract specifies.

Licensed escrow holders must follow fiduciary and trust-account rules. Always request a written receipt that confirms the amount, date, and account where your money is held.

When you pay the deposit

Most Ohio purchase agreements require you to deposit the funds within a short window after acceptance, often 1 to 3 business days. The actual deadline in the contract controls. Missing the deadline can create a dispute or give the seller remedies under the agreement.

To avoid delays, decide how you will transfer the money before your offer is submitted. Many title companies accept wire transfers or certified checks. Confirm the instructions in writing and verify wire details directly with the escrow holder.

Contingencies that protect your deposit

Your contract’s contingencies preserve your right to a refund if a qualifying issue arises. Common protections include:

• Inspection contingency. If you terminate within the inspection period as the contract allows, your deposit is typically returned.
• Financing contingency. If your loan is denied and you give timely notice with any required documentation, you should get your deposit back.
• Appraisal contingency. If the home does not appraise and you cancel within the agreed timeline, your deposit is usually refunded.
• Title contingency. Serious title problems that cannot be cured often allow termination and a refund.

Each contingency has timelines and notice rules. Missing a deadline or failing to provide required documents can put your refund at risk.

When you could lose your deposit

If you breach the contract, the seller may be allowed to keep the earnest money or seek other remedies under Ohio law. Examples include unjustified termination or failing to close without a contractual excuse.

Many contracts include a liquidated damages clause that limits the seller’s remedy to keeping the deposit. Whether that clause applies depends on the contract language and the facts. If you are unsure, consult an Ohio real estate attorney before you sign.

How disputes and refunds are handled

If both parties agree, the escrow holder releases the funds according to the contract. If there is a disagreement, the contract may require mediation, arbitration, or litigation. Escrow holders can also deposit the funds with the court and let the judge decide if needed.

To protect yourself, keep copies of all notices, inspection reports, lender letters, delivery receipts, and emails. Clear documentation helps resolve questions quickly.

New Albany factors to keep in mind

New Albany includes a high share of newer and custom homes, and many neighborhoods are part of homeowners associations. These local factors can affect how deposits are structured.

• New construction. Builders may require larger or staged deposits, and portions can become nonrefundable after design selections or construction milestones. Builder contracts are not the same as standard residential agreements, so review deposit and refund provisions carefully.
• HOAs and covenants. You will typically receive governing documents and disclosures. If you discover significant restrictions or assessments during the review period, the contract may give you the right to terminate and recover your deposit. Follow the timelines precisely.
• Competitive offers. In sought-after neighborhoods, sellers may favor larger deposits or shortened timelines. Balance competitiveness with appropriate protections.

Strategy tips for competitive offers

• Calibrate your deposit. A stronger deposit can signal commitment, especially on higher-priced homes. Pair it with clear contingency timelines so you stay protected.
• Define appraisal gap terms. If you offer to cover an appraisal shortfall, spell out how that interacts with your financing contingency and deposit. Ambiguity can lead to disputes.
• Shorten timelines only if ready. Faster inspections and financing milestones can help your offer stand out. Make sure you can meet them before you commit.
• Choose a neutral escrow. If either party prefers additional neutrality, using a title company escrow can add confidence.

Step-by-step timeline example

• Day 0: Offer accepted. Contract names the escrow holder and sets your deposit amount and deadline.
• Days 0 to 2: You deposit funds and obtain a written receipt.
• Days 3 to 10: Inspection window. You complete inspections, negotiate repairs, or terminate within the allowed period if needed.
• Days 0 to 21–30: Financing and appraisal period. Your lender orders the appraisal and processes your loan. You monitor deadlines and deliver any required notices.
• Closing date: If all contingencies are satisfied and financing clears, your deposit is applied to your purchase or closing costs.

Checklist before you make an offer

• Confirm your pre-approval and budget, including how much earnest money you can comfortably deposit.
• Ask who will hold the funds and how quickly you must deliver them.
• Decide your transfer method and verify escrow instructions.
• Set clear contingency periods with calendar dates and know the notice steps.
• For new construction or complex terms, have an Ohio real estate attorney review the contract.

How the Perez Team supports you

You deserve clarity and a smooth process from offer to closing. With deep experience in New Albany and builder relationships across the Columbus suburbs, our team helps you set the right deposit, structure protective contingencies, and manage every deadline. You will know what to expect, when to act, and how to reduce risk while staying competitive.

Ready to talk strategy for your next New Albany offer? Connect with Angel Perez and the Perez Team for personalized guidance and a confident path to the closing table.

FAQs

How does earnest money work in New Albany, Ohio?

• It is a good-faith deposit that accompanies your offer, is held in escrow, and is applied to your purchase or closing costs if the sale closes. Contract terms control deadlines and refund rights.

How much earnest money should I offer in Franklin County?

• Many buyers use $1,000 to $5,000 or about 1 to 3 percent of the price. In competitive or higher-priced situations, larger deposits are common, balanced by strong contingency terms.

Who holds the deposit in Ohio real estate deals?

• Title companies, closing attorneys, or broker trust accounts commonly hold the funds. Your contract will name the escrow holder and deposit timing.

Is earnest money refundable after inspections in Ohio?

• If you terminate within the inspection period and follow the notice rules in the contract, the deposit is typically refunded. After the period expires or is waived, refund rights are limited.

What happens to earnest money if my loan is denied?

• If your contract has a financing contingency and you cancel within the deadline with required lender documentation, you should get your deposit back. Without that contingency, your deposit could be at risk.

Can the seller keep my deposit if I back out?

• Possibly. If you breach the contract or miss contingency deadlines, the seller may be able to keep the deposit or pursue other remedies, depending on the agreement and Ohio law.