Wondering how much earnest money to put down in Montgomery County, and when you actually have to pay it? You are not alone. In competitive areas like Chevy Chase View, Bethesda, Kensington, Silver Spring, and Rockville, the deposit you choose can help your offer stand out while still protecting your budget. This guide breaks down common local ranges, key timelines, where funds are held, and smart ways to strengthen your offer without taking on unnecessary risk. Let’s dive in.
What earnest money is
Earnest money is a good-faith deposit you offer when you make an offer on a home. It shows the seller you are serious and ready to perform. If you close, the deposit is credited toward your cash to close at settlement.
It is not the same as your down payment. Think of earnest money as a show of commitment that also gives the seller some protection if you default, subject to the contract’s contingencies and timelines.
How much to offer in Montgomery County
There is no fixed number, but local norms in Montgomery County cluster into a few ranges:
- Many average-range homes: $2,500 to $10,000 is common.
- Higher-priced homes in areas like Bethesda and Chevy Chase View: 1 to 3 percent of the purchase price is typical. For a $700,000 home, that is about $7,000 to $21,000.
- Very competitive or luxury situations: some buyers offer $25,000, $50,000, or more, depending on price and competition.
A practical rule of thumb: expect an initial deposit between a few thousand dollars and 1 to 2 percent of the price for many offers. In hotter submarkets, sellers may expect a stronger show of commitment.
What drives the amount:
- Price and neighborhood. Higher-priced areas often see higher deposits.
- Competition. Multiple offers can push deposits up.
- Risk tolerance. If you are keeping inspection or financing contingencies, you may choose a moderate deposit. If you are waiving protections, you may choose to increase it.
- Lender documentation. Very large deposits can require added paperwork for your mortgage. Plan ahead so underwriting is smooth.
When you pay the deposit
In Maryland practice, the contract sets the deadline. Many forms call for delivery of the deposit shortly after a contract is fully signed, often within 3 business days. Some buyers include a check with the offer and ask that it be held until acceptance, or they wire funds after ratification.
Other timelines matter because they influence whether your deposit is protected:
- Inspection period: often 7 to 10 days, but can range from 5 to 14 days based on the offer.
- Financing contingency: commonly 21 to 30 days to secure loan approval.
- Appraisal timing: typically falls within the financing period.
If you act within your contingency windows and terminate per the contract, your earnest money is typically returned. If you miss a deadline or default after removing contingencies, the seller may claim the deposit.
Where your deposit is held
Your earnest money is placed in a trust or escrow account until closing or release.
Common holders in Montgomery County:
- Title or settlement company that will close the transaction.
- Real estate brokerage trust account.
- Real estate attorney escrow account in less common cases.
Protect yourself by asking for a written receipt that shows the amount, date received, and who is holding the funds. If wiring, always verify instructions by calling the title company or escrow officer at a trusted phone number. Wire fraud scams are real, so double-check before you send anything.
When you get it back vs. when it can be kept
Returned to you in common cases:
- You terminate properly within a contingency period in the contract, such as inspection, financing, or title review.
- Both parties sign a written release that cancels the contract and directs the escrow holder to return funds.
At risk of forfeiture:
- You default after contingencies have been removed or after deadlines expire. If the contract allows, the seller may keep your deposit as liquidated damages.
- You agreed to nonrefundable terms in writing. Read this language closely and consider legal counsel before you commit.
If there is a dispute, the escrow holder will usually keep the funds in the account until both parties agree in writing or a court or arbitration decides. Maryland contracts control how that process works.
Ways to strengthen your offer without extra risk
If you want your offer to stand out in Chevy Chase View, Bethesda, Kensington, Silver Spring, or Rockville, you have options besides a very large deposit.
- Show strong financing. Provide a detailed pre-approval and proof of funds for closing.
- Shorten, do not eliminate, contingencies. For example, a 7-day inspection window instead of 10 to 14 days.
- Use an escalation clause. Increase your price up to a cap if higher offers appear, rather than pushing a huge deposit.
- Tie nonrefundable terms to milestones. If needed, make a small portion nonrefundable after the inspection period or after the financing contingency, with the rest refundable.
- Offer flexible terms. A preferred closing date or short rent-back can matter more to some sellers than deposit size.
- Consider staged deposits. Start with a smaller initial deposit, then increase it on an agreed date or after a contingency is satisfied.
If you are considering large nonrefundable deposits or unusual terms, talk with your agent and consider advice from a real estate attorney.
Practical safeguards that protect you
Use these steps to lower risk while keeping your offer strong:
- Specify the escrow holder in your contract. Name the title or escrow company.
- Get a receipt. Secure written confirmation for every deposit or wire.
- Document funds early. Share bank statements for earnest money with your lender to avoid underwriting delays.
- Set clear deadlines. Keep inspection, financing, and appraisal dates realistic and track them closely.
- Verify wire instructions. Call the title company using a known phone number before you send a wire.
- Avoid signing away protections casually. Nonrefundable or no-contingency offers can be risky. Understand the tradeoffs first.
Neighborhood notes: what to expect
- Chevy Chase View and Bethesda. Higher-priced listings often see deposits of 1 to 3 percent, especially in multiple-offer situations.
- Kensington and Rockville. You will see both flat deposits in the $2,500 to $10,000 range and percentage-based deposits depending on price point and competition.
- Silver Spring. Submarkets vary. Close-in neighborhoods that draw multiple offers may mirror Bethesda-style deposits, while other areas may align with moderate flat amounts.
Local norms change with market conditions. Your strategy should fit both the home and the competition you face that week.
Next steps for a smooth deposit process
- Line up funds. Keep the deposit accessible so you can deliver within the contract’s timeframe.
- Choose a settlement partner. Decide which title company will hold escrow and close the transaction.
- Plan inspections fast. Have inspectors ready so you can meet a shorter contingency window if needed.
- Coordinate with your lender. Share earnest money documentation early and confirm appraisal timing.
- Tailor your offer. Match deposit size and terms to the neighborhood and listing activity.
A calm, well-structured offer can compete strongly without exposing you to unnecessary risk.
Ready to tailor an earnest money strategy to your target neighborhood and price point? Reach out for local guidance, a realistic plan for contingencies and timelines, and support from trusted title and lending partners. Connect with Gabriel Oran - Main Site to get started.
FAQs
How much earnest money is typical in Chevy Chase View or Bethesda?
- In higher-priced neighborhoods, 1 to 3 percent of the purchase price is common, though some buyers still use flat amounts. The right number depends on price and competition.
When is earnest money due in Montgomery County contracts?
- Many Maryland contracts call for delivery within a short period after acceptance, often within 3 business days. Your signed contract controls the exact deadline.
Who holds the deposit and how is it protected?
- Deposits are usually held by a title company or brokerage trust account in escrow until closing or release. Always obtain a written receipt and verify any wire instructions by phone.
Can I get my earnest money back after an inspection in Silver Spring?
- If your contract includes an inspection contingency and you terminate properly within that window, the deposit is typically returned. If you waive that contingency, you may be at risk.
What happens if the appraisal comes in low in Rockville?
- If your offer includes an appraisal contingency that allows termination, you can often cancel and recover your deposit. Without that contingency, your deposit could be at risk.
Can the seller keep my deposit if my financing falls through?
- If you have a valid financing contingency and follow the timeline, the deposit is usually returned. Without that protection, or if you miss deadlines, the seller may claim it.
How can I make a competitive offer in Kensington without a huge deposit?
- Use a strong pre-approval, shorten key contingencies, consider an escalation clause, or offer flexible terms like a preferred closing date. You can also stage deposits to limit risk.