Thinking about making an offer on a home in Newark and wondering how much earnest money you should put down? You’re not alone. This is one of the most common questions buyers ask, especially in a fast-moving market. When you understand how earnest money works in Ohio, you can write a stronger offer and protect your deposit at the same time. This guide breaks down typical Newark deposit amounts, when funds are refundable, how escrow works, and smart steps to keep your money safe. Let’s dive in.
Earnest money basics in Ohio
Earnest money is a good‑faith deposit you offer with your contract to show the seller you are serious. If the sale closes, your deposit is credited toward your down payment and closing costs.
In Ohio, the purchase agreement controls what happens to that money. Standard forms used by many brokers in our state include clear terms about who holds the deposit, when it is due, and how refunds or forfeitures work. Whether you get it back depends on contract contingencies, deadlines, and performance by both parties.
How much to offer in Newark
There is no fixed amount required by law. In Licking County and the Newark area, buyers typically size their deposit to the price point and competition level:
- Entry-level homes or listings under about $200,000: often $500 to $2,000.
- Mid-range homes: commonly $1,500 to $5,000, or about 0.5% to 1.5% of the price.
- Competitive or higher‑priced situations: 1% to 3% of the purchase price, sometimes more if multiple offers are expected.
Sellers often view larger deposits as a sign of commitment. That can help your offer stand out. It also increases your risk if you miss a deadline or waive a contingency, so balance competitiveness with comfort.
Choosing your number
Use these quick filters to set an amount that fits your goal and risk tolerance:
- Price tier and competition: Higher price or tighter inventory usually means a higher deposit.
- Your comfort with risk: Never put up more than you can reasonably risk if you decide to waive or shorten contingencies.
- Contract strength: Strong contingencies and clear timelines may allow a more moderate deposit while still signaling commitment.
- Local norms: Ask your agent about recent Newark offers in your price range so you stay in step with the market.
Who holds your deposit
Your purchase agreement will name the escrow holder. In Ohio, deposits are commonly held by:
- A title or closing company.
- A real estate brokerage (listing or buyer’s brokerage).
- A law firm that handles closings.
These escrow holders must keep deposits in a separate trust account and maintain records. Always confirm who holds the funds and how to deliver them before sending money.
When and how to deliver
The contract sets the timing. Typical practice is to deliver the deposit within a few business days after both parties sign the agreement. You can usually pay by cashier’s check, personal check, or wire transfer. For larger amounts, some escrow holders prefer a cashier’s check or wire.
Best practices:
- Make the funds traceable and obtain a written receipt showing date, amount, and who holds the money.
- Keep copies of checks, wire confirmations, and escrow receipts for your records.
Wire safety checklist
- Call the escrow or title company using a verified phone number to confirm wire instructions before you send funds.
- Do not rely on wire instructions received only by email. Confirm by phone with a known contact.
- If instructions change, assume fraud until you verify with the escrow holder directly.
When your deposit is refundable
Your contract’s contingencies are your main refund protections. If you follow the notice and deadline terms correctly, you can usually cancel and get your deposit back if a contingency is not met. Common contingencies include:
- Financing contingency: You can cancel if your loan is not approved within the contract terms.
- Home inspection contingency: You can cancel within the inspection window or request repairs. If you cancel on time and in writing, the deposit is typically refundable.
- Appraisal contingency: If the appraisal comes in lower than the price and you cannot reach a new agreement, you can cancel.
- Title or survey review: If permitted issues are not resolved, you may cancel per the contract terms.
The key is timing and documentation. Give written notice exactly as required and before the deadline. If you miss a deadline or do not follow the contract’s notice instructions, you may lose your refund rights.
When you could forfeit it
If you default after contingencies are satisfied or waived, the seller may be entitled to keep your deposit, subject to the contract terms. Some contracts include a liquidated damages provision that limits the seller’s recovery to the deposit, while others allow the seller to pursue additional damages. Read your agreement carefully before removing protections.
If the seller cannot perform
If the seller breaches the contract or cannot convey marketable title as required, you may be entitled to a full refund of your earnest money and other remedies allowed by the agreement.
How refunds and disputes work
At closing, the escrow holder credits your earnest money to your closing costs or down payment. If the transaction is terminated, the escrow holder disburses funds according to the contract. Many forms require mutual written instructions if there is a dispute.
If the buyer and seller disagree on who should receive the funds, escrow may place the money in a dispute status until both parties sign a release, the parties complete mediation or arbitration if required, or a court order determines ownership. In some cases, the escrow holder may interplead the funds into court to resolve the dispute.
Newark buyer checklist
Use this step‑by‑step list to lower risk and keep your deposit protected.
Before you write an offer
- Review recent earnest‑money norms for your Newark price range with your agent.
- Decide how much you can comfortably risk if you plan to waive or shorten contingencies.
- Confirm the escrow holder (title company, broker, or attorney) you want named in the offer.
When you make the offer
- Specify the earnest‑money amount and the escrow holder in the purchase agreement.
- Set clear delivery timing for the deposit after acceptance.
- Include standard contingencies unless you intentionally waive them.
After acceptance and deposit delivery
- Obtain a written receipt confirming the deposit was received and placed in escrow.
- Track all deadlines: inspection period, financing date, appraisal timing, title review.
- If you need to terminate under a contingency, send written notice before the deadline exactly as the contract requires.
Before closing
- Confirm your deposit credit on the draft closing statement.
- Re‑verify any wire instructions by phone with the escrow or title company using a known number.
If a dispute arises
- Ask your agent to secure the escrow account record and disbursement requirements.
- Consider mediation or legal counsel if you believe you followed the contract and the seller disputes your refund.
Local insights for Newark buyers
- Escrow practices can vary among local title companies and law firms. Some may prefer a cashier’s check or wire, especially for larger deposits. Confirm requirements early to avoid delays.
- Deposit expectations move with the market. In tighter inventory segments of Newark, sellers may favor larger deposits or shorter contingency windows. Your agent can calibrate your approach to the current competition.
- Title questions, tax items, and certain liens are handled at the county level. The seller’s obligation to deliver marketable title and your title review rights are defined by your contract.
Final thoughts
A well‑sized earnest deposit can make your offer more compelling in Newark, but your contract terms and timing are what truly protect your money. Set an amount that matches your comfort level, use clear contingencies, and follow every deadline and notice step in writing. With a plan and the right guidance, you can compete confidently and keep your deposit safe.
Have questions about how these rules apply to your price range or neighborhood in Licking County? Reach out to Shannon Lists Homes for local, data‑driven guidance and a calm, step‑by‑step plan from offer to closing.
FAQs
What is earnest money in an Ohio home purchase?
- It’s a good‑faith deposit you submit with your offer to show commitment, held in escrow and credited to your closing costs if the deal closes.
How much earnest money do Newark, Ohio buyers usually put down?
- Typical ranges are $500 to $2,000 for entry‑level homes, $1,500 to $5,000 or about 0.5% to 1.5% for mid‑range, and 1% to 3% in competitive situations.
Who holds earnest money in Newark and Licking County?
- A title company, a real estate brokerage, or a closing attorney named in your purchase agreement, all using separate trust accounts.
When is earnest money refundable for Newark buyers?
- If you cancel on time and in writing under a contract contingency like inspection, financing, appraisal, or certain title issues, the deposit is typically refundable.
Can a seller keep my earnest money in Ohio?
- If you default after contingencies are satisfied or waived, the seller may be entitled to the deposit under the contract, and could seek other damages if allowed.
How soon do I need to deliver my earnest money in Ohio?
- Most contracts require delivery within a few business days after acceptance; your agreement will set the exact timing and delivery method.
How can I avoid wire fraud when sending my deposit?
- Call the escrow or title company using a verified phone number to confirm instructions, and never act on changed wiring details received only by email.