Buying in Marietta and wondering how earnest money works in Georgia? You are not alone. The terms can feel confusing when you also hear about a due diligence fee, deadlines, and contingencies. In this guide, you will learn what each deposit does, typical amounts around Marietta, and how to make a stronger offer without putting your money at unnecessary risk. Let’s dive in.
Earnest money basics in Georgia
What earnest money does
Earnest money is your good-faith deposit that shows the seller you intend to close. It is credited back to you at closing, usually toward your down payment or closing costs. Whether it is refundable depends on the contract and whether you use the timelines and contingencies correctly.
Who holds the money in Marietta
In Georgia, the earnest money is typically held in escrow by the closing attorney, title company, or another escrow agent named in the contract. Using a neutral closing or title agent is common practice and keeps the funds secure until closing or release.
When you pay it
Your purchase agreement will spell out the delivery deadline for the earnest money. Many contracts in Georgia require delivery within a short window after both parties sign, often within 48 to 72 hours. Always confirm who holds the funds and how to deliver them before you send your deposit.
Due diligence fee explained
How the due diligence period works
Georgia uses a due diligence period that gives you a limited, exclusive window to inspect and decide whether to move forward. You usually pay a separate due diligence fee to the seller for this right. If you terminate within the due diligence period, your earnest money is typically returned to you per the contract, but the due diligence fee is usually non-refundable.
EMD vs DDF at a glance
- Earnest Money Deposit: Held in escrow, generally refundable if you terminate properly under the contract and within deadlines, credited to you at closing.
- Due Diligence Fee: Paid directly to the seller, compensates them for taking the home off the market during your inspection window, typically non-refundable once paid.
Typical amounts in Marietta
Common earnest money ranges
Earnest money amounts vary by price point and competition. A common benchmark is around 1 percent of the purchase price, though many buyers use fixed amounts. Entry-level homes sometimes see deposits from about 1,000 to 5,000 dollars in calmer conditions, while multiple-offer situations or higher price points can push deposits higher.
Common due diligence fee ranges
Due diligence fees in Georgia are flexible. In slower markets, they can be a few hundred dollars. In competitive metro areas, they often run from several hundred up to a few thousand dollars. In stronger bidding environments, some buyers raise the due diligence fee to stand out.
Examples by price point
- Example A, 350,000 dollar home: a 1 percent earnest money deposit would be about 3,500 dollars. A due diligence fee might range from 500 to 2,000 dollars depending on competition.
- Example B, 600,000 dollar home: a 1 percent earnest money deposit would be about 6,000 dollars. A due diligence fee might range from 1,000 to 5,000 dollars in stronger offers.
These examples are for illustration only. Actual amounts in Marietta depend on current inventory, days on market, and seller expectations in your price bracket.
Contingencies and your refund rights
Inspection and due diligence window
During the due diligence period, you can terminate for any reason and typically keep your earnest money per the contract. You will not usually recover the due diligence fee. If you plan to negotiate repairs or credits, do it within this window to preserve your options.
Financing and appraisal
If you cannot secure your loan and you follow the financing contingency requirements and timelines, your earnest money is usually refundable. If the appraisal comes in low, you can negotiate, bring extra funds, or terminate if your appraisal contingency allows. Be sure to deliver any required notices by the contract deadline.
Title and other issues
If a title defect is discovered and not resolved within the timeline, many Georgia contracts allow you to terminate and recover your earnest money. Always check your contract’s notice requirements and keep documentation to support your decision.
Marietta buyer playbook
Make a stronger offer safely
You can make your offer more attractive while still managing risk. Consider these levers and trade-offs:
- Increase earnest money moderately to show commitment, but avoid overstretching funds you cannot risk.
- Use a due diligence fee that reflects competition. Larger fees can help in multiple-offer situations, but they are typically non-refundable.
- Keep the due diligence period focused and realistic, often 7 to 14 days, so you can complete inspections without rushing.
- Avoid waiving key contingencies unless you fully understand the risk and have the financial cushion to cover surprises.
- If needed, structure a specific appraisal gap amount rather than an open-ended promise.
7 to 14 day timeline checklist
- Day 0, Ratification: Deliver the due diligence fee to the seller if required. Deliver earnest money to the escrow holder within the contract deadline, often 48 to 72 hours.
- Days 0 to 3: Order your home inspection and any specialty inspections. Notify your lender of the ratified contract so underwriting can begin.
- During due diligence: Complete inspections, review disclosures, and confirm your financing path. Order the appraisal promptly if your lender allows.
- Before the due diligence deadline: If you plan to terminate, send the notice properly and on time. If you continue, finalize repair agreements or credits in writing.
- After due diligence: Continue loan approval and clear remaining contingencies. Your deposit is more exposed if you default after this point.
- Closing: Your earnest money is credited toward your funds at closing if the sale completes.
Protect your deposit
- Get a full pre-approval, not just a pre-qualification, before you write an offer.
- Confirm in writing where your earnest money will be held, the delivery method, and the exact deadline.
- Schedule inspections within 48 to 72 hours of contract to leave room for follow-up evaluations.
- Track every deadline. Put reminders on your calendar for due diligence, financing, and appraisal contingencies.
- Keep records of all notices, inspection reports, lender letters, and repair agreements.
- Communicate with the closing or title company and your agent to confirm receipt and handling of funds.
When things go sideways
If a dispute arises about releasing earnest money, the escrow holder may require a signed release from both parties or a court order. If you miss a deadline or fail to provide a required notice, the seller may claim your earnest money as liquidated damages if the contract allows. The due diligence fee is generally non-refundable after delivery unless the seller agrees otherwise.
Work with a local advisor
Georgia’s dual-deposit structure rewards precise timing and clear strategy. The right plan can help you win in a competitive Marietta market while keeping your risk in check. If you want a tailored offer strategy, deposit guidance by price point, and tight contract management from ratification to closing, let’s talk.
Ready to move with confidence? Reach out to Sterling Realty Partners, Inc. to map your next steps.
FAQs
What is the difference between earnest money and the due diligence fee in Georgia?
- Earnest money is held in escrow and may be refundable if you terminate under the contract and on time, while the due diligence fee is paid to the seller and is typically non-refundable.
How much earnest money should I offer for a Marietta home?
- A common benchmark is about 1 percent of the price, though fixed amounts like 1,000 to 5,000 dollars are also used; adjust for price point and local competition.
When is earnest money refundable in Georgia?
- It is generally refundable if you terminate within the due diligence period or under other contract contingencies like financing or appraisal, provided you meet all notice deadlines.
Who holds the earnest money in Cobb County and how is it released?
- A closing attorney, title company, or named escrow agent usually holds it; if there is a dispute, the escrow holder may require a signed release from both parties or a court order.
What happens to my earnest money if the appraisal is low in Marietta?
- You can renegotiate, bring additional funds, or terminate if your appraisal contingency allows and regain your earnest money by following contract timelines.
Can I get my due diligence fee back in Georgia?
- Usually not; the due diligence fee compensates the seller for the exclusive inspection window and is typically non-refundable once paid.
Is my earnest money applied to my costs at closing?
- Yes; if the sale closes, your earnest money is typically credited toward your down payment or closing costs per the settlement statement.
