Have you heard you need “earnest money” to buy a home in Plymouth, but you are not sure how much or when to pay it? You are not alone. This deposit is a small part of your offer that carries big weight with sellers. In this guide, you will learn what earnest money is, local norms in Plymouth and the Lakes and White Mountains area, how refunds work, and how to protect your deposit. Let’s dive in.
Earnest money basics in New Hampshire
Earnest money is a deposit you offer to show good faith when you make an offer on a home. It is not your down payment or closing costs. If you close, the deposit is credited toward your cash to close.
The purchase and sale agreement controls how the deposit is handled. Standard New Hampshire forms set the amount, when it is due, who holds it, and what happens if either side defaults. If there is a dispute, the contract terms and, if needed, a court decision determine the outcome.
Plymouth norms: amounts, timing, and holders
Typical amounts
- For many New Hampshire homes, earnest money is often $1,000 to $5,000, or about 1% to 3% of the purchase price.
- In competitive situations, such as desirable Lakes Region or White Mountains vacation homes, buyers sometimes offer 3% to 5% or more to strengthen an offer.
- In Plymouth, lower-priced or student-rental properties may see smaller flat deposits, such as $1,000. Single-family and vacation properties more often use percentage-based deposits that scale with price.
When the deposit is due
- Many offers include the check with the offer or require delivery within 1 to 3 business days after acceptance.
- Some contracts use a short window, such as 3 to 5 business days. Always follow the signed contract for exact timing and delivery instructions.
Who holds the funds
- Listing broker trust account is common.
- Title company or closing attorney is also common in the area.
- An attorney escrow account for one of the parties can be used in attorney-driven closings.
How your deposit is protected
Proper handling and documentation
Licensed brokers must keep client funds in escrow accounts. Title companies and attorneys hold funds under fiduciary escrow practices. You should receive a receipt and clear written instructions in the contract about how the deposit will be handled. Whether interest accrues depends on the escrow holder’s policies.
Common refund triggers
Your earnest money is typically refundable if you cancel within the contract terms due to:
- Inspection contingency
- Financing or mortgage contingency
- Title contingency
- Home-sale contingency, when included
- Failure of closing conditions stated in the contract
- Mutual written agreement between buyer and seller
When you could forfeit the deposit
If you default after all contingencies are satisfied or waived, the seller may seek to keep the deposit under a liquidated damages clause, or pursue other legal remedies, depending on the contract and facts. Escrow holders generally wait for written instructions, a mutual release, or a court order before disbursing disputed funds.
If there is a dispute
Most brokers require a mutual release to disburse contested funds. If the parties do not agree, you may follow the dispute steps in your contract, which can include mediation, arbitration, or litigation. Keep detailed records and watch the dates. Disputes can slow or stop a closing.
Local examples for Plymouth buyers
Here are simple illustrations based on common practices. These are examples, not property valuations.
- Starter home at $250,000
- 1% earnest money: $2,500
- Flat deposit option sometimes seen: $1,000
- Typical single-family at $400,000
- 1% to 2%: $4,000 to $8,000
- Competitive vacation listing at $600,000
- 2% to 3% or more: $12,000 to $18,000
How deposit size affects your offer
A higher deposit signals commitment and can help in multiple-offer situations. It can be persuasive when paired with reasonable contingencies and strong terms. Keep in mind that a larger deposit increases your exposure if you waive key protections and later cannot close.
Seasonal and property-type tips
- Lakes and White Mountains vacation homes: In peak season, sellers may expect stronger deposits, especially from out-of-area buyers who can close quickly. A higher earnest money amount with clear contingency timelines can make your offer stand out.
- University-area rentals: For properties near Plymouth State University, sellers often accept lower, faster deposits to keep timelines simple.
What to check in your contract
Review these details with your agent or attorney before you sign:
- Exact deposit amount, due date, and who holds the funds
- Which contingencies allow for a refund, plus the deadlines for each
- Whether there is a liquidated damages clause and what it allows
- Any language about default, forfeiture, and additional remedies
Buyer checklist before you tour or offer
- Get a lender pre-approval. This helps you choose a deposit that fits your budget.
- Ask about current Plymouth norms for earnest money based on property type and season.
- Confirm the escrow holder and request a written receipt after delivery.
- Map all contingency deadlines in your calendar and set reminders.
- Bring to your buyer consult: lender pre-approval, ID and contact info, questions about contingencies and escrow, and your timeline goals.
Final thoughts
Earnest money is a small part of your offer that sends a big message to Plymouth sellers. The right amount, delivered on time and backed by well-written contingencies, can strengthen your position while protecting your budget. If you want a clear plan that fits your property type, season, and financing, connect with a local guide who handles these details every day. Reach out to Juli Kelley to talk through deposits, timelines, and offer strategy that fits you.
This article explains common practices and examples. Your signed purchase and sale agreement controls your rights and obligations. This is not legal advice. Consult your real estate agent or attorney for contract-specific guidance.
FAQs
What is earnest money when buying in Plymouth, NH?
- It is a good-faith deposit credited to you at closing that shows sellers you intend to complete the purchase. The purchase and sale agreement sets the rules for amount, timing, and outcomes.
How much earnest money is typical for Plymouth homes?
- Many offers use $1,000 to $5,000 or about 1% to 3% of the purchase price. Competitive vacation properties may see 3% to 5% or more.
When do I pay the earnest money in New Hampshire?
- Often with the offer or within 1 to 3 business days of acceptance, though some contracts allow 3 to 5 days. Follow the exact timing in your signed agreement.
Who holds my deposit in a Plymouth transaction?
- Common holders are the listing broker’s trust account, a title company, or a closing attorney. The contract should name the escrow holder.
Can I get my earnest money back if financing falls through?
- If you have a financing contingency and you cancel within the stated timeframe, you typically receive a refund. If you waive the contingency, you increase the risk of forfeiture.
What if the seller refuses to release my earnest money after I cancel under a contingency?
- Escrow holders usually need written instructions or a mutual release to disburse funds. If there is a dispute, your contract may call for mediation, arbitration, or court action.
Do I earn interest on my earnest money in New Hampshire?
- It depends on the escrow holder’s policies and the escrow agreement. Ask the holder at the time of deposit.
