Making an offer on a home in Greenwood and wondering how much earnest money you should put down and when it is due? You are not alone. This is one of the first questions first-time buyers in 46143 ask, and getting it right can strengthen your offer and protect your money. In this guide, you will learn what earnest money is, typical amounts in our area, when it is due, who holds it, and how to keep it safe. Let’s dive in.
What earnest money is
Earnest money (also called an earnest-money deposit or EMD) is a deposit you include with your offer to show the seller you are serious about buying. The amount and timing are written into your purchase agreement. It is held in escrow, then applied to your down payment or closing costs at closing.
If the contract is canceled within protected contingency windows, your deposit is typically returned according to the agreement. If you default outside those protections, the seller may be entitled to keep it per contract and state rules.
How much earnest money in Greenwood
There is no single required amount. In many U.S. markets, a common range is about 1% to 3% of the purchase price. In lower-priced or low-competition situations, flat-dollar deposits of $500 to $2,000 are also common. In more competitive scenarios, some buyers go higher, such as 3% to 5%, to stand out.
Here are example calculations to make it concrete:
- $150,000 home: 1% = $1,500; 2% = $3,000
- $250,000 home: 1% = $2,500; 2% = $5,000
- $350,000 home: 1% = $3,500; 2% = $7,000
Local norms in Greenwood (46143, Johnson County) align with broader Midwest practices. The right number for you depends on the price point and how competitive the listing is. Ask your agent to confirm current expectations with the listing agent or local title companies.
How to choose your number
- Match the market: If multiple offers are expected, consider the higher end of your comfort range.
- Balance cash flow: Pick an amount that shows commitment but does not stretch your reserves needed for inspections and closing.
- Pair with strength: Combine a solid deposit with a strong preapproval and clear timelines in your offer.
When earnest money is due
Your offer should spell out the exact amount and due date. In our area, earnest money is typically due within 24 to 72 hours after mutual acceptance. Make sure you know the clock start (often the date of full acceptance) and the delivery method so you can meet the deadline.
Who holds your deposit
Your purchase agreement should name the escrow holder. In Indiana, earnest money is commonly held by a title company or escrow agent, and sometimes by a real estate brokerage’s trust account. The funds stay in that escrow account until closing or until released per the contract.
At closing, your earnest money is credited toward your down payment or closing costs, or returned if the contract requires it.
Buyer protections and contingencies
Your contract may include contingency windows that can protect your deposit if you cancel for covered reasons. Common protections include:
- Inspection contingency: Time to inspect the home and request repairs or cancel if major issues are not resolved (per contract terms).
- Financing contingency: If you cannot obtain your loan by the deadline, you may cancel and recover your deposit if you follow the notice steps.
- Appraisal contingency: If the appraisal comes in low and the parties cannot resolve the gap, you may cancel and keep your deposit.
- Title review: If clear title cannot be delivered and the defect is not cured, cancellation with refund is typical.
- HOA document review: Time to review association documents and cancel if needed within the window.
- Sale-of-home contingency: If included, your deposit is usually protected if your current home must sell first (language varies).
Important: Time windows and notice procedures matter. Put all notices in writing and follow the delivery method in the contract. Shortening or waiving contingencies can help you compete but increases your risk.
Timeline from offer to closing
- Offer accepted: The clock starts on your contingency periods.
- Earnest money due: Usually within 24 to 72 hours of acceptance. Get a written receipt.
- Inspection period: Often 7 to 14 days from acceptance. Submit repair requests or cancellation in writing before the deadline.
- Appraisal and financing: Your lender orders the appraisal and aims for a loan commitment by the contract date. If financing fails, the contingency language controls your deposit.
- Closing: Your earnest money is applied to your final cash to close on the settlement statement.
Keep your deposit safe
Wire fraud is a real risk. Protect yourself with these steps:
- Verify wiring instructions by phone using a known, independently sourced number for the title company.
- Confirm the exact escrow account name and payee spelling.
- Use checks or verified wires only to the named escrow holder.
- Obtain a written receipt with date, amount, and account reference.
What to do step by step
- Get preapproved and gather proof of funds (with sensitive details redacted).
- Choose a deposit amount with your agent based on price and competition.
- Write the offer with the deposit amount, deadline, and named escrow holder.
- After acceptance, deliver the funds within the contract window and collect a receipt.
- Track all contingency deadlines and send any notices in writing before they expire.
- Before closing, confirm your earnest money credit on the closing statement.
What to keep on file
- Lender preapproval letter
- Proof of funds (redacted statement or letter)
- Copy of your check or wire confirmation
- Escrow receipt showing date, amount, and account
- All written notices and repair requests with delivery proof
- Final closing statement showing your earnest money credit
Handy scripts you can use
- Asking the listing agent about deposit expectations: “Hi, I am preparing an offer for [address]. What deposit amount does the seller prefer, who should hold it, and do they expect it within 24, 48, or 72 hours?”
- Verifying wiring instructions: “I have wiring instructions, and I want to confirm them by phone. Please share the title company’s direct number so I can verify the account and beneficiary before I send funds.”
- Requesting a receipt: “I just sent the earnest-money deposit for [address] in the amount of [$X]. Please email a receipt with the date, amount received, and the account it was deposited into.”
- Strengthening without more cash: “If the seller prefers a larger deposit, would a shorter inspection period or firmer financing timeline be acceptable instead?”
Common mistakes to avoid
- Missing the deposit deadline or forgetting to name the escrow holder in the offer
- Wiring funds without confirming instructions by phone with the title company
- Waiving key contingencies without fully understanding the risk to your deposit
- Letting inspection or financing deadlines pass without written notices
Ready to move in Greenwood?
If you want clear guidance from offer to closing in 46143, you are in the right place. I combine organized checklists, steady communication, and southside market expertise to help you protect your deposit and win the home you love. When you are ready, reach out to Angi Oakes for local-first advice backed by leadership and award-winning results.
FAQs
What is earnest money and how is it used at closing in Greenwood?
- It is a good-faith deposit held in escrow, then credited to your down payment or closing costs at closing, or returned per the contract if you cancel within protected contingencies.
How much earnest money should a first-time buyer offer on a $250,000 home in 46143?
- Many buyers choose 1% to 3% of price, so roughly $2,500 to $7,500, though lower flat amounts can be acceptable in less competitive situations; tailor it to the listing and your budget.
When is earnest money due after my offer is accepted in Indiana?
- The contract controls, but a common window is 24 to 72 hours after mutual acceptance; your offer should state the exact deadline and the escrow holder.
Can I get my earnest money back after a failed inspection in Greenwood?
- Typically yes if you act within the inspection window and follow the contract’s written notice steps, especially when material issues are not resolved.
What happens to earnest money if my loan is denied?
- Financing contingency language controls; if you provide timely lender documentation and proper notice by the deadline, you can usually cancel and receive a refund.
Who resolves disputes over earnest money in Johnson County?
- Your purchase agreement sets the process, which may require mediation, arbitration, or court; the escrow holder usually keeps funds until the dispute is resolved as directed.
