What Is Earnest Money and How Does It Work in Ohio Real Estate? – Cin-Day Group’s Clear Explanation

Have you heard the term “earnest money” and wondered what it really means when you’re getting ready to buy or sell a home in Southwest Ohio? It’s a common part of the real estate process, and understanding how it works can help you make stronger, more confident offers. Let’s break it down in plain language.

What Is Earnest Money?

Earnest money—often called a good faith deposit—is money you include with your offer to show the seller that you’re serious about purchasing their home.

It’s a tangible way to demonstrate your commitment. Instead of just words on paper, your deposit shows that you’re financially ready and intend to follow through once your offer is accepted.

This money is typically held in an trust or escrow account by the title company or real estate brokerage until the deal closes. When everything goes smoothly, it’s applied to your down payment or closing costs at closing.

How Much Earnest Money Is Typical in Ohio?

While there’s no set rule, in most Southwest Ohio real estate transactions, earnest money usually falls between $1,000 and 1%  of the purchase price.

For example, on a $200,000 home, that could mean a deposit of around $1,000 to $2,000. On a $400,000 home, you might expect to put down $1,000 to $4,000.

Your Cin-Day Group Realtor® can help you determine the right amount to make your offer stand out—especially in competitive markets like Oakwood, Mason, Hyde Park, or West Chester, where multiple offers are common.

What Happens to Earnest Money Once You Pay It?

After your offer is accepted, your earnest money is deposited into a secure account where it stays until closing. It’s not paid directly to the seller—it’s held by a neutral third party to protect both sides.

If the transaction goes as planned, the deposit is credited back to you at closing, reducing what you need to bring to the table.

When Can You Get Earnest Money Back?

There are several scenarios where you can receive a refund of your earnest money, usually when your contract includes certain protections or contingencies. These can include:

• The home inspection reveals significant issues and you can’t reach an agreement on repairs.

• The appraisal comes in lower than the purchase price.

• Your financing falls through despite a good-faith effort.

• The seller fails to meet agreed-upon terms.

Your agent will make sure these contingencies are clearly outlined in your contract so your deposit is protected if something beyond your control occurs.

When Might You Lose Earnest Money?

In most cases, buyers only lose their earnest money if they back out without a valid reason outlined in the contract or fail to meet key deadlines.

That’s why having an experienced Southwest Ohio Realtor®—like the Cin-Day Group—is so important. We help you stay on track, meet your obligations, and avoid costly mistakes that could put your deposit at risk.

Why Earnest Money Matters in Ohio Real Estate

In today’s competitive housing market, sellers sometimes receive multiple offers. Including earnest money in your offer shows that you’re serious, financially stable, and ready to close.

For sellers, it’s reassurance that the buyer won’t walk away without cause. For buyers, it can make your offer stronger and more appealing, especially when competing for a desirable property.

Partner With Cin-Day Group for Trusted Guidance

Whether you’re preparing to buy or sell a home in Southwest Ohio, understanding earnest money gives you an advantage. The Cin-Day Group at Coldwell Banker Heritage is here to help you navigate every detail with honesty, professionalism, and local expertise.

Ready to make your next move with confidence?
Contact the Cin-Day Group today to learn more about how to structure your offer and protect your investment.