Are you wondering how much earnest money you need to put down on a Brentwood home, and what happens to it after you do? You are not alone. This deposit can make your offer stand out, but it also ties up real cash for a period of time. In this guide, you will learn what earnest money is, how much buyers in Brentwood typically offer, where the funds are held, key timelines and contingencies, and smart ways to strengthen your offer while protecting your deposit. Let’s dive in.
Earnest money basics
Earnest money is a good-faith deposit you make when your offer is accepted. It shows the seller you are serious about buying. It is not an extra fee. If you close, the deposit is applied to your cash to close, such as your down payment and closing costs.
This deposit gives the seller confidence and reduces the chance of a buyer walking away. It also gives the seller leverage if a buyer breaches the contract, which may include forfeiture of the deposit depending on contract terms. At the same time, your earnest money is typically protected by contingencies in your contract. If you cancel for a covered reason, within the deadline, you can usually get your deposit back.
How much in Brentwood
Across many U.S. markets, earnest money often ranges from 1 percent to 3 percent of the purchase price. In Brentwood and Williamson County, prices are higher than national medians and competition can be strong. That means deposits here often land toward the upper side of the typical range. Expect amounts in the thousands to tens of thousands of dollars, depending on price.
Here are simple illustrations to help you plan:
- On a $500,000 home: 1 percent is $5,000, 2 percent is $10,000.
- On an $800,000 home: 1 percent is $8,000, 2 percent is $16,000.
There is no single norm for every home or season. Ask your agent for recent comps and current practice in your price band and neighborhood, since what is typical can shift within months.
Factors that affect the amount
- Market balance. In a strong seller’s market, deposits trend higher.
- Price and property type. Luxury homes often draw larger deposits.
- Competition. Multiple offers push buyers to increase deposits.
- Contingencies and concessions. If you ask for many protections or seller credits, a higher deposit can offset risk for the seller.
- Financing strength. Cash buyers or those with firm preapproval may offer smaller deposits when other terms are strong. A larger deposit can help a financed buyer stand out.
Who holds your deposit
Earnest money is usually held by a neutral third party. In Tennessee, title companies often hold the funds, though a closing attorney or the listing brokerage’s trust account may also serve as escrow. You should always receive a written receipt and escrow instructions that name the holder, the account type, and contact details.
Keep those documents in your records. If questions come up later, that receipt will be essential.
When earnest money is due
Most contracts require you to deliver earnest money soon after both parties sign. Common timelines are 24 to 72 hours. Some offers specify within 48 business hours or within 3 days. Sellers may favor offers that provide immediate delivery or attach proof of funds.
Confirm the exact deadline in the contract you sign. Missing the deposit deadline can weaken your position or put you in default.
Contingencies that protect you
Your contract will outline protections that allow a refund of your earnest money if you cancel for a covered reason within the timeline. Common contingencies include:
- Home inspection contingency. You can terminate or negotiate repairs within the inspection window.
- Financing or mortgage contingency. If you cannot secure loan approval by the deadline, you can cancel per the contract.
- Appraisal contingency. If the appraisal is lower than the purchase price and parties do not agree on a new price or solution, you can cancel within the timeline.
- Title contingency. If title issues cannot be cleared, you can typically cancel.
- Home sale contingency. Less common in competitive segments, but it allows you to cancel if your current home does not sell.
Act on time and in writing. If you decide to cancel, send a written notice before the deadline to preserve your refund rights.
When earnest money can be at risk
You could forfeit your deposit if you breach the contract outside of a protected contingency period. For example, cancelling after the inspection deadline without seller agreement may trigger liquidated damages if the contract allows it. Some contracts limit the seller’s remedy to the deposit. Others allow additional damages. The exact outcome depends on the language in your agreement and state law.
In a dispute, many contracts call for mediation, arbitration, or litigation. The escrow holder will release funds only with mutual instructions or after a court or arbitrator decides. If a dispute arises, involve your agent quickly and consider consulting a real estate attorney.
How earnest money strengthens an offer
A larger deposit signals commitment and lowers perceived risk for the seller. In multiple-offer scenarios, this can make your offer more compelling. Fast delivery of funds and clear proof of funds or a strong lender preapproval also help your case.
You can also strengthen your offer with smart terms that do not add undue risk, such as a closing date that fits the seller’s timeline, an escalation clause, or shorter but reasonable contingency deadlines. The goal is to balance competitiveness with protection.
Understand the risk tradeoffs
Boosting your deposit can help you win. It also increases the amount of cash at risk until closing. Waiving contingencies is even riskier since you may forfeit the deposit if problems appear later. Review each term with your agent and lender. Make sure the risk level matches your comfort and the property’s condition.
Plan your cash flow
Strong offers are planned offers. Before you write, map out the sequence of funds and the timing:
- Earnest money deposit soon after contract acceptance.
- Inspection and potential repair costs during the inspection period.
- Appraisal gap coverage if needed, depending on valuation and your loan.
- Down payment and closing costs at settlement.
Keep funds in accounts with clear transaction history. Escrow holders and lenders prefer traceable sources. Plan how you will move money between accounts and how you will provide proof of funds when you submit your offer.
Wire safety checklist
- Call to verify wire instructions using a trusted, independently verified phone number.
- Confirm the company name and account details match your escrow holder’s official information.
- Never rely only on emailed instructions. Confirm by phone with known contacts.
- Send a small test transfer if time permits, then send the remainder after verbal confirmation.
- Keep wire receipts for your records.
A quick Brentwood buyer checklist
- Confirm your liquid funds for the deposit and closing costs.
- Request neighborhood-specific deposit guidance from your agent.
- Set reminders for every contingency deadline in your contract.
- Keep your escrow receipt and escrow contact details in one place.
- Coordinate with your lender on appraisal timing and any gap strategy.
- Verify wire instructions by phone before sending any funds.
Offer strategies for Brentwood
- Ask your agent for recent examples from your target neighborhood and price band. Deposits shift as the market changes.
- For competitive or luxury listings, consider a larger deposit or faster delivery paired with strong financing terms and shorter timelines.
- To stay balanced, combine a reasonable deposit with a strong preapproval, flexible closing date, and quick inspection window, often 7 to 10 days.
- If a large deposit makes you uncomfortable, discuss alternatives. You may consider staged increases after inspection or mortgage approval, documented in an escrow agreement and aligned with your contract.
What to do next
Earnest money is a small part of your total budget, but it plays a big role in how your offer is received. With the right amount, clear timelines, and strong terms, you can compete confidently while protecting your interests.
If you are planning a Brentwood purchase, partner with a local advisor who can show you current deposit norms, structure buyer protections, and negotiate the details. Reach out to Janelle Waggener to plan your deposit strategy and build a winning offer.
FAQs
How much earnest money do Brentwood sellers expect?
- It varies by price, property, and competition. In many markets, 1 to 3 percent is common. In Brentwood, deposits often trend higher because of price points and demand. Ask your agent for current neighborhood norms.
When is my earnest money due after an accepted offer?
- Check your contract. Many deals require delivery within 24 to 72 hours. Confirm the exact deadline before you sign and calendar it.
Where is my earnest money held, and how do I get proof?
- Funds are often held by a title company in Tennessee, or by a closing attorney or brokerage trust account. Always get a written receipt and escrow contact details.
If the inspection finds issues, do I lose my deposit?
- Not if you act within the inspection contingency window. You can cancel or negotiate per the contract. Send notice in writing before the deadline.
Can a seller keep my deposit and also sue me?
- It depends on your contract. Some agreements limit the seller to keeping the deposit as liquidated damages. Others allow additional remedies. Ask your agent and consider legal advice if you are concerned.
How should I plan my cash for a Brentwood purchase?
- Set aside funds for the deposit, inspection, appraisal gap coverage if needed, down payment, and closing costs. Keep money in traceable accounts and prepare proof of funds for your offer.
How do I avoid wire fraud when sending my deposit?
- Verify wire instructions by calling a known, trusted phone number for your escrow holder. Do not rely only on email. Confirm account details before sending funds.