04/22/2026
š° Earnest Money in Georgia: What Every Agent Needs to Know
Earnest money questions come up in almost every transactionāand misunderstanding it can cost your clients BIG. Hereās a quick breakdown to keep you (and your deals) protected š
š What is Earnest Money?
A good-faith deposit that shows a buyer is seriousāand itās applied toward closing costs at the end of the deal.
š How Much is Typical?
Usually 1%ā3% of the purchase price (but always negotiable depending on the market).
ā° When is it Due?
Per the contractātypically within 24ā72 hours after binding agreement. Missing this deadline can put your buyer in default.
š¦ Who Holds It?
A neutral third party (brokerage or closing attorney) in an escrow account.
ā When Does the Buyer Get it Back?
When they terminate under a valid contingency (due diligence/inspection, financing, appraisal, etc.) and within deadlines.
ā ļø When Does the Seller Keep It?
If the buyer defaults (terminates or fails to close without a valid reason), the earnest money may be kept by the Seller as liquidated damages.
š« Can Funds Be Released Without Agreement of Both Parties?
Yes. Although the contract typically requires mutual agreement or a court order, the contract may allow the Holder of the funds to make a āreasonable interpretationā of the Contract, and send a letter to all parties who have the opportunity to object. If no valid objections are received, the Holder may then release the funds.
š„ Top Mistakes to Avoid:
ā¢ Missing deadlines
ā¢ Assuming earnest money is automatically refundable
ā¢ Not understanding contingencies
ā¢ Failing to confirm the deposit was made
š” Bottom Line:
In Georgia, earnest money isnāt just about the depositāitās about the contract terms that control it.
š£ Make sure your clients understand the details before they signābecause thatās where deals are won or lost.
