Is earnest money really necessary when you buy in Derry, NH? If you are getting ready to write an offer, that small deposit can make a big difference in how a seller views your commitment. You want to be competitive without taking on unnecessary risk. In this guide, you will learn what earnest money is, how it works in New Hampshire, what is typical in Rockingham County, and how to protect your funds from contract to closing. Let’s dive in.
Earnest money basics
Earnest money, sometimes called an earnest money deposit or EMD, is a buyer’s deposit made with an accepted purchase agreement to show good faith. It is not required by law, but it is part of most accepted offers because it signals that you intend to close. If the sale is completed, your deposit is credited toward your down payment or closing costs at closing. If the deal falls through under a valid contingency, the deposit is typically returned under the contract terms.
The purchase and sale agreement controls everything about your deposit. It sets the amount, who holds it, when it is due, and when it can be released. Clear language and meeting deadlines are the keys to protecting your money.
How deposits work in Derry, NH
Local practice in Derry and Rockingham County is similar to the rest of New Hampshire, with a few practical points that matter in a competitive environment.
Who holds the funds
Your deposit is placed in escrow with a neutral party. Common holders include a title company, a closing attorney, or a broker’s escrow or trust account. The agreement will name the escrow agent and include instructions for how the money is held and released according to New Hampshire rules and brokerage procedures.
How much to expect
Typical deposits vary by price and competition level. Buyers often offer 1 percent to 3 percent of the purchase price as a rule of thumb. On lower priced homes, deposits of 1,000 to 5,000 dollars are common. In multiple offer situations, some buyers choose a larger deposit to show stronger commitment, but that choice also increases risk if you later default.
When you must deliver
The contract sets the due date. In many New Hampshire deals, you deliver the deposit upon mutual acceptance or within 24 to 72 hours. Be ready to send a wire or provide certified funds quickly so you do not miss a deadline. Always get a receipt and confirm the escrow account details.
What to document
Make sure your purchase and sale agreement states the deposit amount, where it will be held, and the release conditions. Keep copies of the signed contract, the escrow receipt, and any written notices tied to contingencies. Good documentation helps avoid disputes later.
What happens at closing
If you close, your earnest money is applied to your buyer funds at settlement. If the sale fails under a valid contingency and you terminate properly and on time, the deposit is returned according to the contract.
Contingencies that protect your deposit
Contingencies are your safety net. They allow you to cancel within set time frames and get your deposit back if certain conditions are not met.
Inspection contingency
You typically have a set inspection window, often 7 to 14 days, to complete inspections and negotiate repairs. If you decide to cancel within this period and follow the notice requirements, you can receive a refund of your deposit. Ask your inspector about availability before you set your timeline.
Financing contingency
This clause gives you time to obtain loan approval, often 21 to 30 days, depending on the lender and loan type. If your financing is denied and you provide proper notice per the agreement, your deposit is usually refundable.
Appraisal contingency
If the property does not appraise at or above the purchase price and you do not wish to bridge the gap, you can terminate within the terms of your appraisal clause. In that case, the deposit is typically refundable.
Title and sale contingency
If the title search reveals an issue that is not resolved, you may cancel and receive a refund based on the title provisions in the contract. If you include a sale of buyer’s home contingency and you do not meet the condition by the deadline, you can cancel and recover the deposit as stated in the agreement.
When your deposit is at risk
Your earnest money can be forfeited if you breach the contract. Common examples include missing a contingency deadline, failing to provide required notices in writing, or backing out after contingencies are satisfied without a contractual reason. Many agreements allow the seller to keep the deposit as liquidated damages or to pursue other remedies. The exact outcome depends on the contract language and New Hampshire law that applies to that agreement.
If there is a disagreement about who gets the money, the escrow holder will usually keep the funds until both sides sign a mutual release or a court or binding arbitration resolves the dispute. Most New Hampshire contracts include a dispute resolution clause that sets that process.
Timelines Derry buyers should plan for
Local practice can vary, but you should expect a fast pace once your offer is accepted.
- Pre offer: get a pre approval and gather proof of funds.
- Deposit due: plan for 24 to 72 hours to deliver earnest money in the form required by the agreement.
- Inspection period: often 7 to 14 days, depending on inspector availability and scope.
- Financing period: often 21 to 30 days, based on lender and loan program.
- Closing window: often 30 to 60 days from acceptance, based on financing and title work.
Build these steps into your calendar so you never miss a deadline.
Strategies to compete in Rockingham County
In many parts of Rockingham County, sellers value strong, clean offers. Your deposit can help, but it should fit your risk tolerance.
- Consider a larger deposit to show commitment if you are comfortable with the risk. A bigger number can improve your position, especially when terms are similar.
- Shorten contingency periods only if your team can execute. Confirm inspector dates and lender timelines before you shorten.
- Keep the contingencies that matter to you. Waiving an inspection or appraisal can expose you to high costs or financing issues.
- Include a current pre approval and proof of funds with your offer. This reduces concern about your financing contingency.
- If you use an escalation clause, pair it with clear deposit terms. It should be drafted so the seller and listing agent can follow it easily.
Practical checklist for your earnest money
Use this quick list to stay organized from offer to closing in Derry.
- Confirm who will hold your deposit and get the escrow account details in writing.
- Prepare wire or certified funds before you write the offer so you can deliver on time.
- Attach a current pre approval and proof of funds to your offer package.
- Set realistic inspection and financing deadlines with input from your inspector and lender.
- Make sure release conditions are clear in the contract and keep copies of all notices.
- Obtain a receipt for your deposit and track all escrow communications.
Handling disputes and next steps
If a seller refuses to release your deposit when a contingency applies, deliver a formal written demand and follow the dispute process in your contract. That may include mediation, arbitration, or filing suit in court, depending on the agreement and the amount in dispute. If you breach and the seller keeps the deposit, the contract may allow the seller to retain it as liquidated damages or seek additional damages. The exact remedy depends on the written terms.
Local resources that often help with process clarity include New Hampshire Association of Realtors forms, the New Hampshire Real Estate Commission for escrow rules, Rockingham County title companies, and local real estate attorneys. Your agent can coordinate these resources and keep your timeline moving.
Key takeaways for Derry buyers
- Earnest money shows commitment and is governed by your purchase and sale agreement.
- Typical deposits range from 1 percent to 3 percent of price, with 1,000 to 5,000 dollars common on lower priced homes.
- Protect your deposit by meeting deadlines and giving written notice under each contingency.
- Larger deposits and shorter timelines can strengthen your offer, but they also increase risk.
- Keep good records and get receipts for everything placed in escrow.
Ready to write a confident offer in Derry or greater Rockingham County? Connect with Rebecca Curran Realty for a clear plan, tight timelines, and detail focused guidance from offer to closing.
FAQs
How much earnest money is typical for Derry, NH buyers?
- Many buyers offer 1 percent to 3 percent of the purchase price, with 1,000 to 5,000 dollars common on lower priced homes, depending on competition and price point.
Who holds earnest money in New Hampshire home purchases?
- A neutral escrow agent holds it, often a title company, a closing attorney, or a broker’s escrow or trust account, as specified in the contract.
When do you get earnest money back if a Derry deal falls through?
- If you cancel within a valid contingency and follow notice rules and timelines, the deposit is typically refunded per the purchase and sale agreement.
How fast must you deliver earnest money after offer acceptance in NH?
- Many contracts require delivery upon acceptance or within 24 to 72 hours, so be ready with wire or certified funds and get a receipt.
Can a seller keep your earnest money in Rockingham County, NH?
- If you breach the agreement or miss deadlines after contingencies are satisfied, the seller may be entitled to keep the deposit, subject to the contract terms and any dispute process.
