Is earnest money making you second-guess your offer in Franklin? You want to compete in a strong market without putting your deposit at risk. In a few minutes, you’ll understand how much to offer, when it is refundable, and how to keep your interests protected under Tennessee contracts. Let’s dive in.

Earnest money explained

Earnest money is a good-faith deposit you put down when a seller accepts your offer. It shows you are serious and ready to move forward. At closing, it is usually credited toward your down payment or closing costs. If you breach the contract, there can be consequences for your deposit based on the agreement.

Typical amounts in Franklin

In many markets, buyers offer about 1–3% of the purchase price or a flat amount that fits the price point. Franklin and greater Williamson County are competitive, higher-priced areas, so buyers often choose larger deposits to stand out. There is no set rule. Ask your agent about what is customary for your neighborhood and price range so you can stay competitive without overexposing yourself.

Who holds your deposit

Your deposit does not go to the seller directly. It is held by a neutral escrow agent, usually a title company, closing attorney, or escrow company named in the contract. The agreement should spell out who holds the funds, how they are handled, and how a release happens if the contract is canceled. Always follow the written escrow instructions in your contract.

Contingencies that protect you

Contingencies define when your earnest money is refundable. Common protections include the inspection contingency, financing contingency, appraisal contingency, and title contingency. Some buyers also use a sale-of-home contingency, though that is less common in multiple-offer situations. Keep these protections in place if you want the option to cancel with a deposit refund under defined conditions.

Deadlines matter

Most Tennessee contracts make time essential. Your inspection period, financing and appraisal deadlines, and closing date all control when your deposit is safe or at risk. If you miss a deadline, you may waive that contingency. Track dates carefully so you can cancel within the allowed window if needed.

When it is refundable

Your earnest money is typically refundable if you cancel within an active contingency period that permits termination. Examples include finding material issues during inspections or losing loan approval under a valid financing contingency. If the seller fails to meet obligations, such as clearing title issues, you may also be entitled to a refund or other remedies. Always follow the contract’s notice procedures.

When it is at risk

If you walk away after contingencies expire or otherwise breach the agreement, the seller may have the right to keep your deposit under a liquidated damages clause, depending on the contract. This is why timing and documentation are so important. Make sure you understand exactly when each contingency expires before making a final decision.

How disputes get resolved

The best outcome is a mutual written release that tells the escrow agent how to distribute funds. If you and the seller disagree, the escrow holder typically keeps the funds until both parties agree or a court order directs release. Some escrow agreements allow the holder to file the funds with the court and exit the dispute. Arbitration or litigation procedures depend on your contract language and Tennessee law.

Step-by-step for Franklin buyers

• Get fully preapproved before you write.
• Ask your agent about typical deposit amounts for your price point and neighborhood.
• Balance strength and safety: offer enough to compete but not so much that you are exposed if a valid issue arises.
• Name the escrow agent in your offer and follow exact delivery instructions.
• Use clear calendar dates for all contingencies and include an inspection window long enough to book vendors.
• Keep financing and appraisal protections if you want refund options while making a competitive offer.
• Deliver funds only to the named escrow agent and obtain a written receipt.
• If wiring money, verify account details directly with the escrow officer to avoid wire fraud.
• Document everything: inspection reports, lender notices, and your communications.

Tennessee specifics to know

Earnest money practices in Tennessee are guided by contract terms rather than a statewide required amount. Agents often use Tennessee REALTORS purchase and sale forms that include standard earnest money provisions. Title companies and closing attorneys in Tennessee follow the written contract and escrow instructions. For complex disputes, consult a Tennessee-licensed real estate attorney.

Common mistakes to avoid

• Guessing at the amount without local guidance. Franklin norms vary by neighborhood and price tier.
• Missing a contingency deadline. That can put your deposit at risk.
• Paying the seller or an agent directly. Always pay the named escrow holder per the contract.
• Skipping preapproval. Strong financing prep supports both your offer and your deposit protections.
• Ignoring wire verification. Always confirm instructions with the escrow officer by phone.

Ready to compete with confidence

With the right strategy, you can offer a strong deposit and still protect your interests. The key is to align the amount, contingencies, and deadlines with local norms and your risk tolerance. If you are planning your next move in Franklin or Williamson County, connect with trusted local advisors who can tailor a plan to your goals. For thoughtful guidance and a seamless process, reach out to the team at Corcoran Reverie.

FAQs

How much earnest money should a Franklin buyer expect to put down?

• There is no set rule, but many buyers offer about 1–3% of the price or a negotiated flat amount, with higher deposits common in competitive Franklin situations.

When is earnest money due after my offer is accepted in Tennessee?

• Most contracts require delivery within a short window, often 1–3 business days after acceptance, to the named escrow agent.

What happens to my earnest money if my mortgage is denied?

• If you have a valid financing contingency and follow its steps and deadlines, your deposit is generally refundable under the contract.

Can I cancel during the inspection period and keep my deposit?

• If you terminate within the inspection window as allowed by the contract, the deposit is typically refundable according to those terms.

Who holds earnest money in a Franklin transaction?

• A neutral escrow agent named in the contract, usually a title company, closing attorney, or escrow company, holds and releases the funds per written instructions.

What if the escrow agent will not release the funds after a dispute?

• Start with your agent and the escrow or title company to seek a mutual release; if unresolved, consult a Tennessee real estate attorney since some cases require court involvement.