Are you wondering how much earnest money you need in Columbia or what happens to it if a deal falls through? You are not alone. This deposit is a small part of your offer, but it has a big role in keeping your contract on track. In this guide, you will learn what earnest money is, how South Carolina handles it, how much to budget in Richland County, and how to protect every dollar. Let’s dive in.
What earnest money is
Earnest money is a good-faith deposit that shows a seller you are serious about buying. It is credited to your cash to close at settlement. If the sale closes, it reduces what you bring to the table. If the sale does not close, what happens next depends on your contract and timelines.
South Carolina’s key twist: due diligence
In South Carolina, you often pay two separate items:
- A due diligence fee paid to the seller at contract ratification.
- An earnest money deposit held in escrow.
The due diligence fee compensates the seller for taking the property off the market while you inspect and decide. If you cancel within the due diligence period under the contract rules, the seller typically keeps that fee. The earnest money is separate and is usually refundable when you terminate properly within the due diligence window or under a valid contingency.
Who holds the funds
Your contract will name the escrow holder. In South Carolina, that can be a real estate attorney, a broker’s trust account, or an escrow/title agent. Proper handling of client funds is regulated. Always confirm the holder’s name, the escrow account type, and how to deliver funds.
How much to budget in Columbia
There is no one-size rule. Amounts vary by price point, property type, and how competitive the listing is.
- Lower-priced homes: buyers often offer a flat deposit like about $1,000.
- Mid-priced homes: $2,000 to $5,000 is common, or roughly 1 percent of the price.
- Higher-priced properties: deposits often move into several thousand dollars, commonly 1 to 3 percent.
In a competitive Columbia neighborhood or on a fresh listing with multiple offers, sellers tend to favor higher earnest money and shorter due diligence periods. In a slower market, you may negotiate a lower deposit and a longer window. Ask your agent to confirm current norms with the listing agent or local association guidance since customs shift with the market.
Price tiers and simple examples
- $200,000 purchase: 1 percent equals $2,000. Some buyers still use a flat deposit if the market is slow.
- $400,000 purchase: 1 percent equals $4,000. In a competitive scenario, deposits may be higher.
Remember to budget for both the due diligence fee and the earnest money deposit since South Carolina commonly uses both.
What moves the amount up or down
- Competition level and days on market.
- Property condition and demand.
- Your overall offer strength, including price and timelines.
- Seller expectations and local practice at the time you write.
Due diligence and contingencies
Your contract sets a due diligence period to complete inspections, review disclosures, confirm financing, and decide whether to proceed. During that period, you can usually terminate per contract rules. If you do, the seller keeps the due diligence fee, and the earnest money is typically returned.
Contingencies also matter. Financing, appraisal, title, and inspection contingencies, if included, create specific paths to cancel and get your earnest money back if conditions are not met by their deadlines. Follow the contract steps in writing and on time.
When earnest money is refunded
- You terminate within the due diligence period per the contract.
- A contingency fails, such as financing or appraisal, and you deliver timely notice.
- The seller does not meet a contractual obligation that allows you to cancel.
When you could lose it
- You miss a deadline or do not give required written notice.
- You breach the contract for reasons not covered by contingencies.
- Your contract includes a liquidated damages clause and you default outside your rights to terminate.
Protect your deposit
A few careful steps go a long way toward keeping your money safe:
- Confirm escrow holder and instructions in writing. Get the entity’s full legal name and contact info.
- Track every date. Calendar your due diligence end date, financing and appraisal deadlines, and any notice requirements.
- Use safe payment methods. Certified check or verified wire only. Get a receipt showing the funds were deposited into escrow.
- Verify wire instructions by phone using a known, trusted number. Do not rely on email alone.
- Keep records. Save proof of payment and all notices you send.
- Have non-standard contract language reviewed by a South Carolina real estate attorney.
Timing and payment basics
Earnest money is typically due soon after contract ratification, often within a few days. Ask in advance which payment methods are accepted. Keep the funds liquid so you can move quickly. Do not depend on money that takes days to clear. After closing, the deposit is credited toward your closing funds.
Common buyer mistakes to avoid
- Confusing the due diligence fee with earnest money. They are separate, with different rules.
- Offering a very low deposit in a competitive situation and losing out. Match market conditions.
- Missing a deadline. Late notices can cost you the deposit.
- Overlooking who holds escrow. Always know where your money is and confirm the trust account.
- Wiring funds based on unverified email instructions. Always call a verified number to confirm.
Quick checklist before you pay
- Confirm local custom for deposit amounts and due diligence timelines.
- Identify who will hold escrow and get written instructions.
- Budget for both a due diligence fee and an earnest money deposit.
- Verify acceptable payment method and get a written receipt.
- Calendar all deadlines and notice requirements.
- Ask your agent to coordinate attorney review if terms are non-standard.
Local guidance that puts you first
If you want a clear plan for earnest money, due diligence, and timelines in Columbia or Richland County, we are here to help. Our team explains each step, lines up your deadlines, and helps you present a competitive but protected offer. When a contract gets complex, steady guidance keeps your money and your move on track.
Ready to talk through your plan? Connect with the Smith Real Estate Group to get local, personalized guidance from a team that puts your goals first.
FAQs
What is earnest money in South Carolina?
- It is a good-faith deposit applied to your closing funds, held in escrow, and governed by your contract.
How much earnest money do Columbia buyers usually pay?
- Many buyers offer a flat $1,000 to $5,000 at lower price tiers or about 1 to 3 percent at higher tiers, adjusted for market conditions.
Who holds earnest money in South Carolina?
- An attorney, a broker’s trust account, or an escrow/title agent may hold it, as named in your contract.
What is the South Carolina due diligence fee?
- It is a separate fee paid to the seller at contract ratification that is typically non-refundable after the due diligence period expires.
When can I get my earnest money back?
- If you terminate within the due diligence period or under a valid contingency while following contract timelines and notice rules.
How quickly do I need to deliver earnest money?
- Often within a few days of contract ratification, using the payment method your escrow holder accepts.
How do I avoid wire fraud when sending my deposit?
- Call a verified phone number for the escrow holder to confirm wiring instructions and never rely on email alone.
What happens to my earnest money at closing?
- It is credited toward your cash to close, reducing the funds you need to bring to settlement.
