Buying in Alpharetta and hearing a lot about earnest money? You are not alone. This small but important deposit can help you win a home and protect you if things change. In this guide, you will learn what earnest money is, how it works in Georgia, typical amounts in Alpharetta, what makes it refundable, and smart ways to keep your deposit safe. Let’s dive in.
What earnest money means in Georgia
Earnest money is a good-faith deposit you make when a seller accepts your offer. It shows you are serious about buying and is credited to your funds at closing. It is not an extra fee. If you close, it becomes part of your down payment or closing costs.
The deposit also gives the seller a measure of protection. If you breach the contract without a valid reason, the seller may keep the funds as liquidated damages. Your purchase contract spells out when that can happen.
Who holds your deposit in Alpharetta
In the Alpharetta and metro Atlanta area, the escrow holder is usually a title company or settlement agent. Some brokerages hold deposits in a trust account. A closing attorney may also serve as escrow holder, depending on the agreement.
What your contract controls
Standard Georgia purchase and sale forms used in metro Atlanta (including GAR and FMLS forms) specify who holds the funds, how and when you deliver them, and the rules for releasing money. Read these sections closely. They outline the deadlines, contingencies, and remedies if either party defaults.
How the process works
Once your offer is accepted, the contract sets the amount and the delivery window for your deposit. You will send the funds to the named escrow holder by the deadline. The holder places the money in a trust account and keeps it there until closing or until the contract says it should be released.
At closing, the earnest money is applied to your total funds due. If you cancel under a valid contingency, the escrow holder returns your funds per the contract terms.
Payment methods and timing
Common payment methods include a personal check, a certified bank check, or a wire transfer to the escrow holder. Many contracts require delivery within 1 to 3 business days after acceptance. Check your exact timeline and plan your transfer so you do not miss a deadline.
Wire safety tips
- Confirm wiring instructions by calling the escrow company at a number you know is real. Do not rely on email only.
- Never send funds to new or changed instructions without live confirmation.
- Keep your wire receipt and ask the escrow holder for a written confirmation of deposit.
When your earnest money is refundable
Your deposit is typically refundable if you cancel under a valid contract contingency and meet the deadlines. Common examples include:
- Inspection contingency. You cancel during the agreed inspection or due diligence period.
- Financing contingency. You make good-faith efforts but cannot obtain your loan within the timeline.
- Appraisal contingency. The appraisal is below the purchase price and you choose not to proceed.
- Title issues. Unresolved title defects allow you to terminate under the contract.
- Seller breach. The seller fails to meet obligations, such as delivering marketable title.
When you could forfeit it
If you walk away without a valid contingency or miss a key deadline, the seller may be allowed to keep your deposit as liquidated damages. If both sides claim the funds, the escrow holder usually holds them until there is a signed mutual release or a court order. Your contract may also call for mediation or arbitration.
How much to offer in Alpharetta
Alpharetta is a high-demand north metro market with higher price points than the state average. Strong deposits can help your offer stand out, but you still need cash for inspections, appraisal gaps, and closing costs. As a general guide, typical earnest money ranges follow market conditions and home price:
- Lower-priced or lower-competition homes: about $1,000 to $5,000.
- Mid-range homes: about $2,500 to $10,000, often 0.5% to 1.5% of price.
- Higher-priced or competitive listings: 1% to 3% or more.
These are examples, not rules. Your agent will help you tailor the right number for the specific home and offer strategy.
Local examples by price
- Example A: A $350,000 Alpharetta home may see $2,000 to $5,000 (about 0.6% to 1.4%).
- Example B: A $600,000 home may see $5,000 to $12,000 (about 0.8% to 2%).
- Example C: A $1,000,000 home or a multiple-offer situation may see $10,000 to $30,000 (about 1% to 3%+).
How to choose your amount
Match the deposit to local norms and the home’s competitiveness. Keep enough cash available for inspections and potential appraisal gaps. Coordinate with your lender, since the source of funds may need to be verified during underwriting.
Offer strategies for Alpharetta buyers
A larger deposit and tighter timelines can strengthen your offer, but they increase risk. Use targeted strategies so you can compete while still protecting yourself.
Inspection and timeline tactics
Keep a reasonable inspection period, such as 7 to 10 business days, so you can inspect, negotiate, or cancel if needed. Book inspectors as soon as you go under contract. Align your inspection and other deadlines with your contract’s contingency dates.
Financing and appraisal tips
Get a strong pre-approval from a lender who knows the local market. If you expect tight appraisals, discuss options such as appraisal contingencies or planning for a potential gap. Do not waive protections unless you fully understand the risk to your deposit.
Protecting your deposit
Name a reputable escrow holder in the contract. Verify wire instructions through a trusted phone number. Keep all receipts and email confirmations for your records.
Quick checklist for Alpharetta buyers
- Confirm the escrow holder, deposit amount, and delivery deadline in your contract.
- Send funds by personal check, certified check, or wire with verified instructions.
- Track inspection, financing, appraisal, and title deadlines on a single calendar.
- Keep documentation of the deposit and all communications.
- Do not waive contingencies without a clear risk plan.
- If a dispute arises, follow the contract’s process for resolution.
Work with a local guide you trust
Your earnest money choices should fit the specific home, the neighborhood, and the pace of the Alpharetta market. A local, design-minded advisor can help you set the right deposit, choose the right timelines, and protect your position from offer to keys. If you are planning a move in Alpharetta or nearby north metro neighborhoods, connect with Rich Richardson for a clear plan and confident representation.
FAQs
How soon do I need to deliver earnest money in Georgia?
- Most contracts require delivery within 1 to 3 business days after acceptance, but you must follow your exact contract timeline.
Who usually holds earnest money in Alpharetta?
- A title company or settlement agent commonly holds the funds; some brokerages use a trust account, and a closing attorney may serve as escrow holder.
What makes earnest money refundable in Georgia?
- Refunds are contract-driven and often tied to inspection, financing, appraisal, title issues, or seller breach within stated deadlines.
When can a seller keep my earnest money?
- If you default without a valid contingency or miss a key deadline, many contracts allow the seller to retain the deposit as liquidated damages.
Is there a separate option or due diligence fee in Georgia?
- Georgia transactions typically rely on the purchase contract and contingencies rather than a separate option fee, and refundability follows the contract terms.
How much earnest money is typical for a $600,000 Alpharetta home?
- A common range is about $5,000 to $12,000, or roughly 0.8% to 2%, depending on competitiveness and your strategy.
How do I avoid wire fraud when sending my deposit?
- Call the escrow holder using a known phone number to confirm instructions, never rely on emailed changes, and keep a copy of your wire confirmation.
