Have you heard people talk about “putting down earnest money” and wondered exactly what that means in Tennessee? You are not alone. If you are buying in Bellevue or West Nashville, your deposit can help your offer stand out and keep your deal on track. In this guide, you will learn what earnest money is, how it works here in Tennessee, what amounts are typical in Bellevue, and how to protect your deposit from the first day to closing. Let’s dive in.
What earnest money means
Earnest money is a deposit you make to show a seller you are serious about buying. It is not a fee. If your purchase closes, the money is applied to your down payment or closing costs.
This deposit can also give the seller limited protection if a buyer breaches the contract (subject to the exact contract terms). In multiple-offer situations, a strong earnest money deposit can help your offer look more committed. The key is understanding your contract so you know when the deposit is refundable and when it is at risk.
How it works in Tennessee
Most Tennessee buyers and sellers use standard purchase forms from the Tennessee Association of REALTORS (or brokerage equivalents). These forms name the escrow agent, the deposit amount, when you must deliver the funds, and the remedies if either party defaults.
Your funds are held in escrow by a neutral party. In the Nashville area, that is often a title company, a closing attorney, or a brokerage trust account. Always confirm who will hold the money and ask for a receipt when it is deposited.
Delivery timing matters. Contracts usually require you to deliver earnest money within a short window after the offer is accepted (often 1 to 3 business days). Miss that deadline and you risk being in breach, which can put your deposit and the deal at risk.
You can deliver funds by check, cashier’s check, or wire transfer. If you wire funds, verify wiring instructions by phone using a known, trusted number for the escrow office (not a number in an unexpected email). Wire fraud targets real estate closings, so slow down and confirm before you send money.
Typical amounts in Bellevue
Earnest money is negotiable, and local market conditions influence what feels “normal.” In balanced markets, deposits are often a few thousand dollars or roughly 1 to 2 percent of the purchase price. In multiple-offer situations, buyers sometimes offer more (2 to 3 percent or a larger flat amount) to strengthen their position.
Here are hypothetical examples to help you budget:
- On a $300,000 home: a typical deposit might be $2,500 to $5,000 (about 0.8 to 1.7 percent). In a competitive week, you might choose closer to 2 percent.
- On a $450,000 home: a typical range is $4,500 to $9,000 (about 1 to 2 percent).
- On an $800,000 home: deposits commonly fall between $8,000 and $24,000 (about 1 to 3 percent).
Your offer strategy should match the current Bellevue and West Nashville conditions. If inventory is tight and listings receive several offers, a higher deposit can signal confidence and help you stand out. If the market slows, a smaller deposit may be acceptable. Talk with your agent about the right signal for your price point and the specific property.
When you can get it back
Whether your deposit is refundable depends on your contingencies and how well you follow the contract. The most common protections include:
- Inspection contingency: If your contract gives you an inspection period (often 5 to 10 business days), you can usually cancel within that window and recover your deposit if you give written notice before the deadline.
- Financing contingency: If you apply on time and do your part but cannot obtain financing within the contract timeline, you may be able to terminate and receive a refund.
- Appraisal contingency: If the appraisal comes in below the price and your contract allows you to cancel or renegotiate, your deposit is typically refundable if you terminate properly.
- Title or HOA review: If title issues or HOA documents reveal material problems and your contract provides for review and termination, you may be entitled to a refund with timely written notice.
Most contracts require written, timely notice to exercise a contingency. If you miss a deadline or do not send notice correctly, you can lose the protection and put your deposit at risk. Keep a calendar of every date and set reminders so you never miss a step.
Buyer protections to know
- Follow every notice rule in your contract (usually written notice delivered by a specific time and method).
- Apply for your loan right away and provide documents quickly. Failing to act promptly can void your financing protection.
- If you must cancel, do it within the applicable period. Waiting until after a contingency expires increases the chance you will forfeit your deposit.
Seller protections to know
- Make sure the contract clearly names the escrow agent and outlines remedies for default. Many forms include a liquidated damages clause that can allow the seller to keep the deposit if the buyer defaults (often as the seller’s sole remedy).
- Require prompt delivery of earnest money and confirm it is received before you remove your home from the market.
- Keep all notices and communications in writing and time-stamped in case a dispute arises.
Typical timeline example
Every contract is different, but here is a common Bellevue sequence:
- Day 0: Offer accepted.
- Days 1 to 3: Buyer delivers earnest money to the named escrow agent (per the contract timeline).
- Days 5 to 10: Inspection period window (confirm the exact dates in your contract and send any notices in writing before the deadline).
- Days 21 to 30: Financing and appraisal milestones are typically resolved within this period.
- Days 30 to 45: Closing occurs after title work and lender final approval.
Use this as a general guide, not a guarantee. Always rely on the dates in your executed contract.
How disputes are handled
Most escrow agents require both parties to sign a written release before they disburse earnest money. If the buyer and seller cannot agree, the escrow holder may keep the funds in trust until the parties reach a settlement. In some cases, the escrow agent may file an interpleader so a court can decide who receives the money.
Disputes often arise from missed deadlines, unclear notices, or disagreements about whether a contingency was met. The best prevention is careful documentation. Send notices in writing, keep copies, and confirm receipt. If you are facing a dispute or a complex situation, speak with your agent and consider consulting an attorney before assuming the deposit will be refunded or forfeited.
Buyer checklist
- Budget earnest money as part of your closing funds (often 1 to 2 percent, or a negotiated flat amount).
- Confirm the escrow agent named in the contract and get a written receipt after you deposit the funds.
- Calendar every deadline (inspection, financing, appraisal, title, HOA) and set reminders.
- If wiring funds, verify instructions by calling the escrow office using a trusted, known phone number.
- If you want more flexibility, consider negotiating a smaller deposit, but balance that with making your offer competitive.
Seller checklist
- Confirm the contract names the escrow agent and includes clear instructions for releases and remedies.
- Require prompt deposit of earnest money and verify receipt before you stop showings.
- Discuss whether to include a liquidated damages clause with your broker or attorney.
- Keep all notices and communications in writing and time-stamped in case of a dispute.
Key takeaways for Bellevue buyers and sellers
Earnest money is a powerful offer tool and an important part of your contract. In Bellevue and West Nashville, deposits often range from a few thousand dollars to about 1 to 2 percent of the price (more if competition is high). The deposit is usually refundable when you use your contingencies correctly and send timely written notices. The best way to avoid problems is to understand your dates, follow the contract process, and keep clear records from offer to closing.
If you want a steady hand on your side as you plan your deposit and craft a strong offer, reach out to Gracie Youngblood. You will get concierge-level guidance, clear timelines, and local insight that fits the Bellevue market.
FAQs
When is earnest money due in Tennessee?
- It is due as specified in your contract, commonly within 1 to 3 business days after your offer is accepted. Deliver it to the named escrow agent and get a receipt.
Can I wire earnest money for a Nashville purchase?
- Yes, you can wire funds, but always verify wiring instructions by phone using a trusted number for the escrow office to avoid wire fraud.
Is earnest money refundable after a bad inspection?
- If your contract includes an inspection contingency and you terminate within that inspection period with proper written notice, the deposit is typically refundable.
Can a seller in Davidson County keep my earnest money without consent?
- A seller can only keep the deposit if the contract allows it (for example, through a liquidated damages clause) or a settlement or court order awards it. Escrow agents usually need a signed release.
How much earnest money should I plan for in Bellevue?
- Many buyers plan for a few thousand dollars or about 1 to 2 percent of the purchase price, then adjust upward in multiple-offer situations based on advice from their agent.
