Earnest Money in Georgia: What Buyers Should Know

Thinking about making an offer on a Roswell home and wondering how earnest money works in Georgia? You are not alone. Georgia adds a unique twist with a separate due-diligence fee, and it can be confusing if you are new to the area. In a few minutes, you will understand typical amounts, refund rules, who holds the funds, and how to protect yourself from wire fraud. Let’s dive in.

What is earnest money in Georgia

Earnest money is your good-faith deposit that shows a seller you are serious about buying. If the sale closes, this deposit is applied to your purchase price. It is usually placed in an escrow or trust account and handled according to the contract.

Georgia also uses a separate due-diligence fee paid to the seller for your exclusive right to inspect during a negotiated due-diligence period. This fee is typically non-refundable once paid, even if you cancel during the due-diligence window. Think of it as paying for the option to investigate and, if needed, walk away during that period, while earnest money is held in escrow and follows the contract’s refund rules.

Typical amounts in Roswell

Across many U.S. markets, earnest money often falls around 1 to 2 percent of the purchase price, or a flat range of about $1,000 to $5,000. In Roswell and North Fulton, the amount you choose should fit the home’s price point and the level of competition at the time you write your offer.

For lower-priced homes, smaller flat-dollar deposits such as $1,000 to $3,000 are commonly seen. For higher-priced homes, buyers often use around 1 percent of the price or more. In a competitive situation, you may strengthen your offer by increasing the earnest money, adjusting the due-diligence fee, or shortening the due-diligence period. Ask your agent for recent local examples so you can match current norms.

Refund rules in Georgia

During due diligence

The due-diligence period is a negotiated window to inspect, review documents, and line up financing and appraisal. If you terminate within this period according to the contract, your earnest money is generally returned. The due-diligence fee you paid to the seller is typically not refundable.

After contingencies expire

If you cancel after the due-diligence period or outside permitted contractual rights, the seller may have the right to keep your earnest money. Contract language controls what happens, so pay close attention to deadlines and procedures.

Contingencies that protect you

• Inspection (within the due-diligence window or as the contract provides)
• Financing or mortgage contingency
• Appraisal contingency

How to protect your refund

• Calendar every deadline the day your offer is accepted.
• Give termination notice exactly as the contract requires and keep proof of delivery.
• Save inspection reports, lender letters, emails, and texts.
• If a dispute arises, follow the contract’s dispute steps and consult your agent or an attorney promptly.

Who holds your funds

Earnest money is typically deposited with one of the following, as specified in your contract:

• Your brokerage’s escrow or trust account
• The seller’s brokerage trust account
• A title or settlement company, or an attorney’s escrow account

Georgia-licensed brokers must follow trust account rules, and title or settlement providers follow applicable escrow laws. Confirm where your money will be held and when it must be deposited, which is often within 48 to 72 hours of an accepted offer. Always get a written receipt, and know that funds are usually held until closing or released per the contract.

Offer steps for Roswell buyers

Before you write

• Get full lender pre-approval.
• Ask your agent what earnest money and due-diligence fee fit your target neighborhoods and price range. Request recent local examples.
• Decide who will hold earnest money and confirm the deposit timeline.

In your offer

• State the earnest money amount and the escrow holder.
• Set the due-diligence period length and due-diligence fee.
• Include inspection, financing, and appraisal contingencies you need.
• Spell out deadlines and how notices must be delivered.

After acceptance

• Deposit earnest money promptly and obtain a receipt.
• Schedule inspections early in the due-diligence period.
• Verify any wiring instructions by phone using a trusted number before sending funds.

If issues come up

• Follow termination procedures to the letter.
• Keep detailed records of all communications and reports.
• If an earnest money dispute arises, follow the dispute resolution steps in your contract and seek guidance.

Wire-fraud safety tips

Wire fraud is a real risk in real estate, so treat wiring instructions with extreme care. Use these safeguards:

• Never rely on email instructions alone. Call a trusted, independently verified number to confirm.
• Use a known phone number from a business card or official website, not one in the wiring email.
• Confirm the account and routing numbers and the correct recipient institution.
• Watch for last-minute changes. Treat any update as suspicious and re-verify by phone.
• Avoid public Wi-Fi for transaction communications. Use secure networks only.
• If you suspect fraud, contact your bank immediately and alert your agent and the escrow holder.

Wrap-up and next steps

In Georgia, earnest money and the due-diligence fee work together to balance your right to investigate with the seller’s need for certainty. Size your deposit to the Roswell market and your price range, protect your timelines, and follow your contract procedures closely. Verify all wiring by phone and keep thorough records from offer to closing.

If you want local, real-time guidance on deposit norms and strategy, connect with Courtney Lott to schedule your free home consultation.

FAQs

What is the difference between earnest money and the due-diligence fee in Georgia?

• Earnest money is a refundable deposit held in escrow under the contract, while the due-diligence fee is paid to the seller for your inspection window and is typically non-refundable.

How much earnest money do Roswell buyers usually need?

• Many buyers use around 1 to 2 percent of the price or $1,000 to $5,000, adjusting higher or lower based on the home’s price and competition; ask your agent for current local examples.

When is earnest money refundable in a Georgia transaction?

• If you terminate under contract rights, such as during due diligence or under inspection, financing, or appraisal contingencies, earnest money is generally returned.

Who typically holds earnest money in Georgia purchases?

• The buyer’s brokerage, the seller’s brokerage, or a title or settlement company (or attorney) holds funds, as the contract specifies.

How quickly do I need to deposit earnest money after acceptance in Roswell?

• Contracts often call for a prompt deposit, commonly within 48 to 72 hours of acceptance; confirm the exact timing in your agreement and get a receipt.

How can I avoid wire fraud when sending earnest money or closing funds?

• Verify wiring instructions by calling a trusted number you obtain independently, confirm all details, be wary of last-minute changes, and avoid public Wi‑Fi for sensitive communications.