Buying in Franklin and hearing you’ll need “earnest money”? You’re not alone. That deposit can feel confusing when you’re trying to write a winning offer and stay on budget. You want to show sellers you’re serious without putting your money at risk.
In this guide, you’ll learn what earnest money is, what’s typical in Franklin and Warren County, when it’s due, and how to protect it with the right contract terms and timelines. You’ll also get a simple offer‑to‑closing timeline and a quick pre‑approval checklist so you can move fast with confidence. Let’s dive in.
What earnest money is in Ohio
Earnest money is a good‑faith deposit you include with an offer to buy a home. In a typical Ohio transaction, it is credited toward your down payment and closing costs at closing. If the sale does not close, what happens to that deposit depends on your contract.
In Ohio, earnest money is governed by the purchase agreement and general contract law. Many area deals use standardized form language, and an escrow agent holds the funds in a trust account until closing or a contract‑permitted termination. The state regulates how brokers handle trust accounts through the Ohio Division of Real Estate & Professional Licensing. For a plain‑English overview of an escrow agent’s role, the American Land Title Association explains it well in what escrow is and how it works.
If you’re new to the term, NAR’s consumer resource HouseLogic offers a quick primer on what earnest money is.
How much Franklin buyers usually put down
There is no fixed rule, but these ranges reflect common practice in Franklin and nearby Warren County communities:
- Many buyers offer a flat amount between $1,000 and $5,000, depending on price point and competition.
- A common rule of thumb is 1% to 3% of the purchase price on higher‑priced homes or in competitive situations.
Your amount should fit your budget and the property’s price band. In a multiple‑offer scenario, a stronger deposit can help your offer stand out, but it is just one factor among many. Your agent can advise on local expectations for the specific neighborhood and price range you’re targeting.
When it’s due and who holds it
You’ll include the proposed earnest money in your offer and state when and how you will deliver it. Local contracts commonly require delivery to the escrow holder within 24 to 72 hours after mutual acceptance. Make sure the timing in your offer matches your plan.
Common ways to deliver earnest money:
- Personal check or cashier’s check payable to the named escrow holder
- Certified funds requested by the title company for larger deposits
- Wire transfer (use strict verification steps to avoid fraud)
Who holds the funds in Franklin area deals:
- A local title company or closing attorney often acts as the escrow agent, holding the funds in a trust account until closing.
- In some cases, the listing broker’s trust account holds the deposit. Either way, funds should remain in a regulated trust account per Ohio rules.
Always ask for a written receipt when you deliver your deposit.
How your deposit is protected
Your protections come from the contingencies and deadlines written into your purchase agreement. Common ones include:
- Inspection contingency. You typically have 7 to 14 days to complete inspections and request repairs or cancel. If you cancel within the window per the contract, your earnest money is usually returned.
- Financing contingency. If you cannot obtain your mortgage by the contract deadline and you give proper notice, you can typically cancel and recover your deposit.
- Appraisal contingency. If the home appraises below the contract price and you cannot reach a new agreement with the seller, your contract spells out your options, which often include cancellation with a refund.
- Title contingency. If title issues cannot be resolved, the buyer can usually cancel and recover the earnest money.
Follow the contract deadlines exactly and deliver all notices in writing as specified. Missing a deadline or failing to send proper notice can put your deposit at risk.
What happens if there’s a dispute? Escrow holders generally keep the funds in trust until the parties reach a written agreement or follow the dispute‑resolution steps in the contract. Many Ohio purchase agreements include mediation or arbitration provisions. If needed, parties may consult a real estate attorney.
Simple Franklin timeline: offer to closing
Use this as a quick reference. Exact dates will match your contract.
Before you write an offer
- Get pre‑approved by a lender and have your letter ready.
- Decide on your earnest money amount with your agent.
- Prepare your delivery method: certified check or wire procedures.
Day 0: Offer submitted
- Your offer states the earnest money amount and delivery window. Example: “Buyer will deliver $2,500 to the title company within 48 hours of acceptance.”
Day 0 to 3: Mutual acceptance and deposit
- Once accepted, deliver your deposit to the named escrow holder within the agreed timeframe. Get a receipt.
Day 3 to 15: Inspection period
- Complete inspections within the contract window, request repairs, or cancel per terms.
Day 7 to 30: Loan processing and appraisal
- Your lender processes your application and orders the appraisal. Many contracts set loan commitment between 21 and 45 days, depending on lender and market speed.
Day 21 to 45: Title work and final underwriting
- Title search and any issue clearing happens while the lender finalizes underwriting.
Closing day: Often 30 to 45 days after acceptance
- Your earnest money is credited toward your down payment and closing costs.
For a deeper look at the mortgage process and timelines, the CFPB’s Owning a Home resource is a helpful guide.
Get pre‑approved and be offer‑ready
A strong offer starts before you write it. Make sure you have these items ready:
- Identification: Government photo ID and your Social Security number
- Income: Recent pay stubs, last 2 years of W‑2s; if self‑employed, 2 years of tax returns and a year‑to‑date profit and loss
- Assets: Last 2 to 3 months of bank statements; statements for any funds used for your down payment; gift letter if funds are a gift
- Debts: Recent statements for student loans, auto loans, and credit cards
- Credit: Authorization for the lender to pull your credit; explanations for large deposits or past credit events, if needed
- Offer prep: Pre‑approval letter, earnest money ready, and your agent’s and title company’s contact details
If you want a broad checklist and timeline overview from a neutral source, bookmark the CFPB’s Owning a Home.
Wire safely and avoid scams
Wire fraud has targeted real estate buyers nationwide. If you plan to wire earnest money or closing funds, follow these steps:
- Confirm all wiring instructions by calling your title company or escrow officer at a verified phone number from their official website or your closing documents.
- Never rely solely on email for wiring details. Fraudsters can spoof or hack email accounts.
- Verify the account name and routing details before sending funds. If anything changes, stop and re‑verify by phone.
For more tips, review the FTC’s guide to real estate closings and wire transfer scams.
Quick tips to avoid losing your deposit
- Put key dates on your calendar the day your offer is accepted.
- Complete inspections early so you have time to negotiate or decide.
- Keep communication in writing and send required notices exactly as your contract states.
- Use a neutral escrow holder such as a title company and get a receipt for your deposit.
- Ask questions if any contract language is unclear before you sign.
Ready to make a strong offer?
If you want help setting the right earnest money amount, mapping deadlines, and preparing a clean, competitive offer in Franklin, you can lean on local experience. Reach out to Meghan Dwyer to talk through your timeline and get offer‑ready with confidence.
FAQs
What is earnest money and how is it used at closing?
- Earnest money is a good‑faith deposit credited to your down payment and closing costs at closing; contract terms control what happens if the deal does not close.
How much earnest money is typical in Franklin, Ohio?
- Many buyers put down $1,000 to $5,000, while higher‑priced or competitive offers often follow a 1% to 3% rule of thumb.
When do I have to pay earnest money after my offer is accepted?
- Most local contracts require delivery to the escrow holder within 24 to 72 hours after mutual acceptance; check your contract for exact timing.
Who holds my earnest money during the transaction?
- A title company or closing attorney commonly holds it in a trust account; sometimes the listing broker’s trust account serves as escrow.
When is earnest money refundable vs. forfeited?
- It’s usually refundable if you cancel within valid contingencies and meet notice deadlines; if you breach the contract without an applicable contingency, the seller may keep it per contract terms.
What contingencies protect my deposit?
- Inspection, financing, appraisal, and title contingencies are common protections if you follow deadlines and notice requirements.
How do I avoid wire fraud when sending my deposit?
- Call your title company at a verified phone number to confirm wiring instructions and never rely only on email before sending funds.
