Buying in Alpharetta and wondering how much earnest money to put down? You are not alone. The deposit you choose can help you win a home, but it also puts real dollars at risk if you miss a deadline. In this guide, you will learn how earnest money works in Georgia, what is typical around Avalon and Windward, and practical ways to protect your funds while staying competitive. Let’s dive in.
Earnest money basics in Georgia
What it is and why it matters
Earnest money is the deposit you include with an offer to show good faith. It gives the seller confidence that you are serious and compensates them if you walk away without a valid reason under the contract. If you close, the deposit is credited toward your cash to close.
Who holds the funds
In Georgia, the contract names who holds earnest money in a trust account. It is often the listing broker, the buyer’s broker, or a closing attorney. You should receive written confirmation showing who holds the deposit, when it was received, and where it is kept.
When you pay and how it is applied
Your contract sets the deadline. Many buyers deliver funds within 2 to 3 business days after acceptance by wire or check. If the transaction closes, the deposit is applied to your down payment or closing costs.
Due diligence vs. earnest money
Due diligence period
Most Georgia contracts include a due diligence or inspection period. This window is negotiable. Common timelines run 5 to 14 days in active markets, and 10 to 21 days for higher-priced or complex homes. You use this time to inspect, confirm financing, and review title.
Due diligence fee vs. deposit
Some deals include a separate due diligence fee paid to the seller. That fee is commonly non-refundable once paid. By contrast, earnest money is typically refundable only if you terminate within the contract’s allowed contingencies and deadlines. Always confirm how both amounts are defined in your signed agreement.
Refunds, forfeiture, and disputes
If you end the deal within the agreed contingencies and give proper notice, earnest money is typically refunded. If you breach the contract after protections expire, the seller can seek to keep the deposit and may have other remedies, depending on the contract. If there is a disagreement, the escrow holder can follow the dispute steps in the contract or interplead the funds to a court.
Alpharetta context: Avalon and Windward
Market backdrop
Avalon offers a luxury, mixed-use lifestyle with walkable amenities and a range of condos, townhomes, and nearby single-family options. Windward is a master-planned community with single-family homes and well-established amenities. Both draw upper-tier buyers and often see multiple-offer situations when homes are priced well.
Typical earnest money ranges
Earnest-money expectations rise with price. In Alpharetta’s mid-to-upper price bands around $400,000 to $1 million, deposits often fall between $5,000 and $25,000, or roughly 0.5% to 1% of the price. For luxury homes above $1 million, it is common to see 1% to 3% of the purchase price in competitive situations, or a flat amount such as $10,000 to $50,000 or more, depending on the listing and seller expectations.
Protect your deposit
Procedural safeguards
- Get a written escrow receipt that confirms the holder, date received, and account type.
- Ensure the contract names who holds funds, when they are due, and how they apply at closing.
- Calendar every deadline for due diligence, inspection, financing, appraisal, and title review.
Timeline management
Missing a deadline can put your deposit at risk. Start inspections immediately and share key dates with your lender and inspector on day one. Ask your agent to confirm how notice must be delivered if you need to terminate within a contingency.
Wiring and logistics
Wires are fast but require caution. Always verify wire instructions by calling a known, trusted number for the brokerage or closing attorney. Avoid holding checks yourself and deliver per the contract to the named escrow holder.
Offer strategies that work
Lower-risk approach
Choose a moderate earnest money amount with full inspection and financing contingencies and a 7 to 14 day due diligence period. This favors protection over speed. It may be less competitive in multiple offers but reduces forfeiture risk.
Competitive approach
Use a larger deposit, often 1% or more, and shorten due diligence to 3 to 7 days. Consider a small due diligence fee and tighter appraisal terms if you are comfortable with the risk. These moves can help you stand out in Avalon and Windward but raise your exposure if you need to back out after deadlines.
Balanced hybrid
Increase the deposit to show commitment, keep a defined but efficient due diligence period, and set clear, focused contingencies for material issues. This strikes a balance between protection and seller confidence.
Real-world examples
- First-time buyer, cautious: Offer at $500,000 with $5,000 earnest money, 10 days of due diligence, plus financing and appraisal contingencies. This lowers risk but may be less competitive in a bidding war.
- Move-up buyer in Alpharetta, competitive: Offer at $1.2 million with $24,000 in earnest money, a 7-day due diligence period, and a small $2,500 due diligence fee. Stronger signal to the seller, with more risk if you withdraw after due diligence ends.
- Luxury buyer with strong financing: Offer at $2 million with 1% to 2% earnest money and a 10 to 14 day due diligence period for comprehensive inspections. Use a local closing attorney to hold escrow and coordinate documentation.
Smart buyer checklist
- Confirm who holds earnest money and get a receipt in writing.
- Start inspections immediately and share timelines with your lender.
- Track all contingency deadlines and required notice methods.
- Clarify if any due diligence fee is refundable or not.
- Use your agent and closing attorney to verify deposits and documents.
Buying in North Fulton is a high-stakes, high-reward decision. When you understand how earnest money and due diligence work in Georgia, you can write a stronger offer without taking on unnecessary risk. If you are planning a purchase around Avalon, Windward, or anywhere in Alpharetta, connect with Rony Smith-Ghelerter to schedule a private consultation.
FAQs
Is earnest money refundable in Georgia?
- It depends on your contract and timing. If you terminate within allowed contingencies and follow notice rules, the deposit is typically refunded.
What happens if a seller backs out of a signed contract?
- If the seller breaches, you generally receive your earnest money back and may have other remedies based on the contract and Georgia law.
How much earnest money is typical in Alpharetta?
- Mid-to-upper price homes often see $5,000 to $25,000 or about 0.5% to 1%. Luxury homes above $1 million commonly range from 1% to 3% or a flat amount.
What is a due diligence fee and is it refundable?
- It is a separate payment to the seller for the due diligence period and is commonly non-refundable once paid. Confirm the exact terms in your contract.
Who holds earnest money in Georgia?
- The contract names the holder, often the listing broker, buyer’s broker, or a closing attorney. You should receive a written receipt confirming the deposit details.
