Earnest Money in Yarmouth: What Buyers Should Know

Thinking about buying a home in Yarmouth and hearing a lot about earnest money? You are not alone. This small but important deposit can help your offer stand out and protect both you and the seller while you move toward closing. In this guide, you will learn how earnest money typically works in Yarmouth, how much buyers often put down, when it is due, who holds it, and how to keep it safe. Let’s dive in.

What earnest money is

Earnest money, sometimes called a good‑faith deposit, shows a seller you are serious about buying. You agree to a deposit amount in the purchase and sale agreement, and the funds are held in escrow until closing or until the contract ends per its terms. If the deal closes, the money is usually credited toward your down payment and closing costs.

Yarmouth market context

Yarmouth in Cumberland County is a desirable Portland suburb with coastal neighborhoods and high buyer interest. In segments with limited inventory, like waterfront or near‑town homes, sellers may see multiple strong offers. In tighter conditions, buyers often increase their deposit or tighten contingency timelines to signal strength. In slower segments, more modest deposits and longer windows can be acceptable.

How much to offer

There is no fixed local rule for earnest money. A common baseline in many U.S. markets is 1 to 3 percent of the purchase price. For lower‑priced homes, some buyers offer a flat amount such as a few thousand dollars. In competitive or higher‑priced situations, buyers sometimes put 5 percent or more to strengthen their position.

In Yarmouth, scale your deposit to the property price and competition level. On an entry‑level purchase, a smaller lump sum may be typical. On a higher‑end property, you may choose a larger, proportional deposit to underscore commitment. Your strategy should reflect your risk tolerance and the current market dynamics for the specific neighborhood and price point.

When earnest money is due

The purchase contract sets your deposit schedule. You will specify the amount in your offer and agree to a delivery deadline after the offer is accepted. Many contracts require delivery within 24 to 72 hours. Some agreements also include a second deposit due later, such as after a set number of days or when contingencies are removed. At closing, earnest money is credited toward your down payment and closing costs.

Who holds the funds

Your contract names the escrow holder. In Yarmouth transactions, deposits are commonly held by:

• A real estate broker’s trust account
• A title or closing company
• An attorney handling the closing

You should receive written confirmation showing who holds the funds, the account type, and the amount. Escrow funds are kept separate from operating accounts and are released only as the contract directs or by mutual written agreement.

Protecting against wire fraud

Wire fraud attempts are common in real estate. To reduce risk:

• Verify wire instructions by phone using a known, trusted number, not a number from an email.
• Confirm the receiving institution’s details on a separate, secure channel.
• Be cautious about last‑minute changes to instructions and do not reply directly to email directions without verification.

Refundable vs. at‑risk deposits

Whether your deposit is refundable depends on your contract and timing.

• Refundable in common cases: If you cancel within a valid contingency period, such as inspection, financing, appraisal, clear title, or sale‑of‑home, and you follow the contract’s notice steps, the deposit is commonly returned. Mutual written agreement to release funds also applies, and some contracts require return if the seller cannot deliver marketable title.
• Forfeiture risk: If you default or breach without a contingency in place, a seller may be allowed to keep the earnest money as liquidated damages per the contract. Missing a deposit deadline can also put you in default. Disputes about breach can lead to mediation, arbitration, or court action depending on the agreement.

Two practical reminders:

• Contingency deadlines are critical. Missing a date can waive a contingency and put your deposit at risk.
• Keep clear records. Written notices, inspection reports, and lender letters help support a timely termination when needed.

Strategy in a competitive Yarmouth offer

In segments where listings draw strong interest, you can use earnest money to strengthen your position:

• Consider a higher deposit that aligns with your budget and comfort level.
• Tighten contingency timelines only if you can realistically meet them.
• Pair your deposit with strong documentation, such as a lender preapproval, to show readiness.

Balance confidence with protection. Your contract’s earnest money and contingency clauses work together to reflect both your commitment and your safeguards.

A step‑by‑step checklist

Before submitting an offer:

• Ask your agent about typical deposit ranges for your target neighborhood and current competition.
• Decide on an amount that matches your risk tolerance and planned contingencies.

At offer acceptance:

• Deliver funds by the contract deadline and get a written receipt that names the escrow holder and account.
• Confirm inspection, financing, and appraisal deadlines in writing.

During the contingency period:

• Schedule inspections quickly, often within 7 to 10 days, and document results.
• Keep your lender updated and provide requested documents promptly.

Before closing:

• Verify closing and wire instructions by calling a known, trusted phone number.
• Confirm how and when your earnest money will be credited on the closing statement.

If something goes off track:

• Provide the required written notices on time.
• Keep all emails, inspection reports, and lender correspondence.
• Work with your agent and consider consulting an attorney if there is a dispute over funds.

Common mistakes to avoid

• Delivering the deposit late or to the wrong party.
• Relying only on email for wiring details without a phone verification.
• Missing contingency deadlines that could protect your deposit.
• Failing to keep copies of reports and notices that support a valid termination.

Local guidance that moves you forward

Buying in Yarmouth often means balancing speed with care. A clear plan for earnest money can help you write a confident offer while protecting your interests through every deadline and milestone. If you are relocating or purchasing a second home, a coordinated approach to inspections, financing, and escrow can make the process far smoother.

If you are ready to talk strategy for an upcoming purchase in Yarmouth, connect with Emilie Cole for local insights and a seamless, concierge‑level experience.

FAQs

How much earnest money do Yarmouth buyers usually put down?

• Use 1 to 3 percent of the price as a starting point, then adjust based on property type and competition, with higher deposits common on premium or competitive listings.

When do I have to deliver the earnest money in Yarmouth?

• Your contract controls the deadline, but many agreements require delivery within 24 to 72 hours of acceptance, sometimes with a second deposit later.

Who holds earnest money in a Yarmouth purchase?

• The escrow holder named in your contract, often a broker’s trust account, a title or closing company, or an attorney, and you should receive a written receipt.

Is earnest money the same as my down payment?

• Not exactly. It is held in escrow and then credited to your down payment and closing costs at closing, but its main role is to show good faith during the contract period.

When is earnest money refundable to a buyer in Maine?

• Typically when you cancel within a valid contingency period and follow notice requirements; once contingencies are removed or deadlines are missed, you may risk forfeiture.

What should I do to avoid wire fraud when sending a deposit?

• Always verify wire instructions by calling a known number, confirm account details through a separate channel, and be cautious about last‑minute changes in directions.