Real Estate by Debbie Reynolds: Must My Offer Have Earnest Money?

Must My Offer Have Earnest Money?

Do You Have to Put Up Earnest Money?

In Clarksville TN, buyers ask this question and I have heard agents in the area say, that it isn't needed because buyers can always get it back.  That is not always the case. Let's look at the facts.


Earnest money deposit

Do you have to put down earnest money? No, earnest money is not mandatory to submit an offer or get one accepted. It does show a seller that your offer is serious and that you have some skin in the game. Some people refer to it as good faith money or escrow deposit. When you think of it that way, it makes an offer seem stronger.


Why? With no earnest money how can the seller believe you are serious? I had one buyer make an offer on a $550,000 new home. The seller thought the buyer was crazy and could not afford to buy the house. That was the message that the buyer sent by not offering earnest money. If the buyer's offer was accepted and he should change his mind and default, what would he lose? Nothing!


Can it be a small amount? The seller ultimately decides what he is willing to take. In some markets or price ranges, a little bit gets the job done. If you are in a multiple offer or highly competitive market, strong earnest money can make the difference in whether your offer is taken seriously and accepted or not.


Can I write a post dated check? Again this depends. If it is for a few days out just so you can transfer funds then it is acceptable but the seller would have to be advised. If it is for several days out or weeks then it would be conveying a message to the seller that you don’t have ready cash and may not be financially prepared to purchase their home. Either way, the seller makes the decision whether this was acceptable to him or not.


But you say the seller will get all his money in the end. I understand that, so why not show how strong of a buyer you are by putting a large amount of earnest down with the offer? If you really want the house, it makes a statement, a good statement.


Can you get it back if you don't qualify? There are contingencies written in contracts and if any of these are not satisfied, then the earnest money would not be forfeited. It will be returned to the buyer.


What if you change your mind? If you have been fully approved and then default, it will be forfeited and usually goes to the seller as damages. Our state contract also says the seller  has rights under the law to pursue other legal action against you as well.


Is the check cashed? Yes, it will be immediately put into an escrow account awaiting the closing of the property. At the closing the monies will be credited to your side of the transaction reducing the amount you need for closing costs and purchase price. 

If you have more questions about the home buying process, contact The Real Debbie Reynolds of Clarksville TN. 931-320-6730.

 Centruy 21 Platinum Properties2130 Wilma Rudolph Blvd.

Clarksville, TN 37040

When you need Real Estate services in Clarksville TN

                  it would be my pleasure to assist you!                             

Debbie Reynolds
"The Real Debbie Reynolds"

Check out all Clarksville TN Real Estate on My Website

931-771-9070 Office | 931-320-6730 Cell

Clarksville TN Homes 


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Comment balloon 17 commentsDebbie Reynolds • March 18 2018 09:22PM


Earnest money is not required in Ohio! However it makes the selle feel like the buyer is serious and have a skin in the game!!!

Posted by Sham Reddy, CRS (H E R Realty, Dayton, OH) 9 months ago

Hi Debbie... I always tell my clients that earnest money is one of the fourelements of a valid contract... written, signed, dated, and with consideration. That being said, they can write a check for $1 in earnest money... doesn't mean the seller with accept it, obviously. At the end of the day, it's a negotiated amount. In NC we can also negotiate when it will be delivered so no need for post-dated checks.

Posted by Nina Hollander, Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor (Coldwell Banker Residential Brokerage ) 9 months ago

This is good information for all buyers, Debbie.  We typically do two escrow deposits here in my area.  A smaller one pre-inspection and a large one (typically 10%) after inspections.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) 9 months ago

Debbie, this is excellent information and a post all buyers should read. An offer with no earnest money deposit wouldn't go far here. 

Posted by Amanda S. Davidson, Alexandria Virginia Homes For Sale (Amanda Davidson Real Estate Group) 9 months ago

Good morning Debbie. I suspect this varies from state to state. In NJ where I was and am licensed, earnest money is required but while there is no specific amount, the norn is 10%.

Posted by Sheila Anderson, The Real Estate Whisperer Who Listens 732-715-1133 (Referral Group Incorporated) 9 months ago

Debbie, great post on earnest money, and with our frenzied market, we are seeing buyers offering twice the amount to strengthen their offer.

Posted by Joan Cox, Denver Real Estate - Selling One Home at a Time (House to Home, Inc. - Denver Real Estate - 720-231-6373) 9 months ago

This is good information to share with prospective home buyers.

An offer without a deposit would not be taken seriously in our market.

Posted by Roy Kelley (Realty Group Referrals) 9 months ago

Good morning Debbie - the earnest money is the least that a serious buyer can offer.

Posted by Grant Schneider, Your Coach Helping You Create Successful Outcomes (Performance Development Strategies) 9 months ago

HI Debbie Reynolds In my area, escrow does not start without earnest money. 

I recently had  multiple offers and we accepted one with a contingency on a home that was closing in two weeks. Come to find out that the buyer knew that a pipe had burst and the house was not going to close on time. This was fraud and there was a paper trail to show it. A Cure notice was sent and the earnest money was forfeited. We were in contract with an even better deal in two days! However it did cost the seller 3 weeks in pending status. 

Posted by Sheri Sperry - MCNE®, (928) 274-7355 ~ YOUR Solutions REALTOR® (Coldwell Banker Residential Brokerage) 9 months ago

We use earnest money in California. Due to a Liquidated Damages clause in our contract, the maximum amount the seller can collect under that clause is 3%. There have been lawsuits against the listing agent for not asking for larger earnest money deposits. So now when I see 1% or less with an offer, I suggest the seller counter and ask for more. Doesn't matter whether we get a higher deposit; matters that I tried.

Posted by Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents, Put 40 years of experience to work for you (Lyon Real Estate) 9 months ago

Debbie- this is excellent information for buyers who may be relatively new to home buying. While real estate is local, the basics are pretty much the same. Buyers need to understand what earnest money means. 

Posted by Kathy Streib, Home Stager - Palm Beach County,FL -561-914-6224 (Room Service Home Staging) 9 months ago

Dear Debbie,

Yes, you definitely need skin in the game or you are not taken seriously.

Posted by Dörte Engel, ABC - Annapolis, Bowie, Crofton & rest of Maryland (RE/MAX Leading Edge) 9 months ago


I echo what Elizabeth says. An offer in my area will go nowhere without an agreement for a deposit within 3 business days of acceptance to escrow, and with competitive bids the amount is even more important.  And I learned today from a friend and an attorney she talked with that not submitting the deposit as agreed on in the contract does NOT prevent the seller from going after the buyer for that deposit.


Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (Solutions Real Estate ) 9 months ago

I believe Idaho law says you must have "consideration" to have a valid contract. Now I'm trying to think back to discussions about what consideration can be.

Posted by Marte Cliff, Your real estate writer (Marte Cliff Copywriting) 9 months ago

Debbie earnest money may not be needed, but it is very unlikely a Seller will accept an offer without it.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) 9 months ago

Accepting an offer without adequate consideration isn't considered a contract, therefore, it is basically worthless.

Posted by Kimo Jarrett, Pro Lifestyle Solutions (WikiWiki Realty) 9 months ago

Debbie, I think you stated well that earnest money indicates an earnest offer.

Thanks for sharing.

Posted by John Wiley, Lee County, FL Real Estate GRI, SRES,GREEN,PSA (Right Move Real Estate Group- EXP Realty) 9 months ago