Buyers sometimes treat earnest money as a formality, a box to check between an accepted offer and a home inspection. At the level I work in, it is rarely treated that way by the other side, and it should not be treated that way by you either.
The Amount Is a Statement Before It Is a Requirement
Georgia does not set a standard earnest money percentage. I have seen everything from one to ten percent offered on comparable homes, and the difference is rarely about what a buyer can afford. It is about what the offer is trying to say. A meaningful earnest money deposit tells a seller this buyer is serious, has done the financial preparation, and is unlikely to walk without cause. On a competitive property, that signal can matter as much as the price itself.
Contingencies Are Where the Real Negotiation Happens
The purchase price gets the attention, but the contingencies, financing, appraisal, inspection, sometimes a sale of the buyer’s current home, determine how much risk a seller is actually taking on by accepting your offer. Two offers at the same price with different contingency structures are not equivalent offers, and sellers at this level generally know the difference.
Where Earnest Money Actually Goes, and Why That Matters
In Georgia, earnest money is held in an attorney’s or broker’s trust account, not handed to the seller directly. I have written before about why Georgia requires an attorney at closing, and this is one of the reasons that requirement exists, to ensure funds are held and disbursed correctly if a deal falls apart mid contract. Buyers occasionally assume the deposit simply becomes the seller’s if something goes wrong. Whether that is true depends entirely on which contingency, if any, was still open when the contract terminated.
What I Tell Buyers Before They Write an Offer
I would rather walk a buyer through exactly what happens to their earnest money under every realistic scenario, financing falls through, the inspection reveals something significant, the appraisal comes in low, before they sign anything, not after. On a property in the millions, that conversation takes twenty minutes and prevents almost every dispute I have seen happen after the fact.
The Conversation Worth Having Before You Write an Offer
If you are preparing to make an offer at the top of Atlanta’s market, how you structure earnest money and contingencies deserves as much thought as the number itself. It is often the difference between an offer that gets accepted and one that does not.
