Earnest Money in Maryville: How It Works

Making an offer on a Maryville home? Your earnest money is the first signal that you are serious. You want to know how much to put down, when it is due, and what happens if the deal falls through. This guide breaks down how earnest money works in Blount County so you can write a confident offer and protect your deposit. Let’s dive in.

Earnest money basics

Earnest money is a deposit you include with your offer to show good faith. It is not an extra fee. If you close, the deposit is applied to your down payment or closing costs. If the sale does not close for a contractually permitted reason, the deposit is typically refundable.

In Tennessee, your purchase contract controls how the deposit is handled. The contract sets the amount, where it is held, when it is due, and how it is released. If there is a dispute, the resolution follows the contract’s dispute clause.

Who holds your deposit in Tennessee

In most local deals, a neutral third party holds the funds in escrow. This can be a title company or closing attorney, an escrow agent, or sometimes a broker’s trust account. Your contract should name the escrow holder and list instructions for delivery and deposit.

You should always receive a written receipt. Keep it with your contract paperwork.

Typical amounts in Maryville

There is no fixed amount required by law. In Maryville and across Blount County, buyers often choose:

• About 1 percent of the purchase price for standard offers.
• Around 1.5 to 3 percent to stand out in competitive situations.
• A flat dollar amount when that feels clearer for budgeting.

For example, on a $250,000 home, 1 percent is $2,500 and 2 percent is $5,000. On a $400,000 home, 1 percent is $4,000 and 2 percent is $8,000. Local expectations vary by price point and how competitive the listing is at the time you write the offer.

How to choose your amount

• If you are a first-time buyer with inspection and financing contingencies, a modest deposit, such as about 1 percent, can limit risk.
• If you are in a multiple-offer situation, a larger deposit can strengthen your offer. Balance that with your comfort level and the protections in your contract.

When you pay and how

Most Tennessee contracts require delivery within a short window after both parties sign. You often see 1 to 3 business days. In competitive cases, some buyers provide the deposit with the offer.

Common payment methods include cashier’s check, certified check, or electronic transfer to the named escrow holder. Always confirm the deposit instructions in your signed contract before sending funds and verify by phone using a number you trust.

Protect your wire

Wire fraud is real. Before wiring money, call the title company or escrow agent at a verified number from their official website or your agent’s introduction. Do not rely on email instructions alone. Confirm the routing and account details and then confirm receipt after you send funds.

When your earnest money is refundable

Refunds depend on your contract’s contingencies and whether you meet the deadlines and notice rules. Here are common paths to a refund when handled on time and in writing.

Inspection period

If your contract gives you an inspection period and you deliver a written termination within that window, you usually receive your deposit back. If you miss the deadline or fail to give written notice, a refund can be harder to secure.

Financing contingency

If your loan is denied and the contract makes your purchase contingent on financing, you can typically terminate and receive a refund when you give timely notice and provide the required documentation, such as a lender denial letter.

Appraisal contingency

If the appraisal comes in below the purchase price and your contract provides options, you can often renegotiate or terminate. If you choose to terminate within the stated timeframe and give proper notice, your deposit is usually refunded.

Title or survey issues

If a material title defect is not cured within the contract period, you may terminate under the title clause. Timely notice under the contract typically allows a refund of the deposit.

HOA or condo documents

If your contract includes an HOA document review and you find a material issue, you can usually terminate within that review period and receive a refund, as long as you follow the notice rules.

Seller default

If the seller fails to perform under the contract, you may demand a refund of your deposit or pursue other contract remedies.

When you could lose your deposit

There are situations where a buyer may not get the earnest money back.

• You change your mind after contingencies expire. If all deadlines have passed and you withdraw, the seller may keep the deposit as liquidated damages if the contract allows.
• You miss a deadline or fail to give required written notice. Late or incomplete notices put your deposit at risk.
• You breach the contract without a permitted reason. If you default, the seller may be entitled to the funds under the contract’s remedies.

How disputes are handled in Tennessee

If buyer and seller disagree about who should receive the deposit, the escrow holder may hold the funds until there is a written mutual release or a court order. Some contracts call for mediation or arbitration before court.

In some cases, the escrow holder may file an interpleader action to let a court decide who gets the money. Disputes can slow the process, which is why documentation and on-time notices matter.

Best practices for Maryville buyers

• Confirm the escrow holder in your contract before sending funds.
• Get a written receipt showing the deposit was placed in escrow.
• Track your key dates: inspection window, financing and appraisal deadlines, and any title or HOA review periods.
• Deliver all notices in writing, on time, and keep proof of delivery.
• Keep your paperwork: executed contract, inspection reports, lender letters, appraisal, title objections, and deposit receipts.
• Adjust your deposit to market conditions and your risk tolerance.
• Verify wiring instructions by phone using a trusted number.

Tips for Maryville sellers

• Specify a reliable escrow holder in the contract and require quick delivery of the deposit.
• Ask for written confirmation when the earnest money is deposited.
• Keep a record of all notices and communications with timestamps.
• If the buyer defaults, check the contract remedies before making decisions on the deposit.

Simple timeline example

• Day 0: Offer accepted and contract executed. Escrow holder named and deposit instructions included.
• Day 1 to 3: Buyer delivers the earnest money to escrow and receives a receipt.
• Days 1 to 10: Buyer completes inspections and either proceeds, negotiates repairs, or terminates by written notice within the inspection period.
• Around the loan and appraisal deadlines: Buyer delivers any required approvals or notices per contract.
• Before closing: If all contingencies are satisfied or waived, the deposit is applied to the buyer’s closing costs or down payment.

Common mistakes to avoid

• Sending funds before the contract names an escrow holder and deposit method.
• Relying on email for wiring instructions without phone verification.
• Missing a termination deadline or failing to send written notice.
• Assuming the deposit automatically refunds without following the contract steps.

Buying or selling in Maryville should feel clear and manageable. If you want step-by-step guidance on offer strategy, timelines, and protecting your deposit, reach out to Krista Freshour. You will get local insight, clear communication, and a plan that fits your goals.

FAQs

How much earnest money should I offer on a $350,000 Maryville home?

• Many buyers choose about 1 percent for standard offers ($3,500) and 1.5 to 3 percent to be more competitive; your final number should match market conditions and your comfort level.

Is earnest money the same as a down payment?

• No. Earnest money is a good‑faith deposit held in escrow during the contract and is applied to your down payment or closing costs at closing.

Where is earnest money held in Tennessee?

• Funds are typically held by a neutral party such as a title company, closing attorney, escrow agent, or a broker’s trust account as named in your contract.

How fast do I need to pay after acceptance in Blount County?

• Many contracts call for delivery within 1 to 3 business days after the contract is signed, though some buyers include it with the offer; your contract controls the exact timing.

When do I get a refund if the deal falls through?

• If you terminate within a valid contingency period and give proper written notice on time, you are usually entitled to a refund as outlined in the contract.

What happens if the seller backs out in Tennessee?

• If the seller defaults, you can typically demand a refund of your deposit and may have other remedies under the contract, such as specific performance or damages.

Can I wire my earnest money safely?

• Yes, when you verify instructions by phone with the escrow holder at a known number, confirm the account details, and get written confirmation after the transfer.