Earnest Money in Brentwood: How It Works

Making an offer on a Brentwood home can move fast, and your earnest money deposit often sets the tone. You want to show sellers you are serious without putting more at risk than you need to. With the right structure and timing, your deposit can strengthen your offer and still protect you if things do not go as planned. In this guide, you will learn how earnest money works in Williamson County, typical amounts, timelines, key contingencies, and practical strategies to use in competitive situations. Let’s dive in.

Earnest money basics

Earnest money is a deposit you submit with an offer to show good faith and commitment. If the sale closes, the deposit is applied to your purchase price or closing costs. If the sale does not close, whether you get it back depends on your contract.

In Tennessee, the deposit is typically held in escrow with a neutral party, such as a title company or closing attorney. Standard Tennessee Association of REALTORS forms are widely used and set procedures for deposit delivery, escrow, and disbursement. Always follow the timelines and clauses in the signed contract.

Earnest money helps sellers feel confident about your offer. It can also give the seller financial protection if you default outside your contractual rights. For you, it is part of the funds you will bring to closing.

Brentwood norms and amounts

Brentwood and Williamson County are higher priced and often competitive. That can raise expectations for earnest money, especially for luxury listings. The right amount depends on price point and how many buyers are competing.

General local heuristics include:

• Entry or lower competition: $1,000 to $5,000 or about 1% of price.
• Mid-range or moderate competition: $5,000 to $15,000 or about 1 to 2%.
• Higher priced or highly competitive properties: $15,000 to $50,000+ or about 1 to 3%.

Sellers also weigh speed of deposit, strength of financing, contingency lengths, appraisal gap coverage, and your closing timeline. A well prepared offer with proof of funds or pre-approval often matters as much as the deposit size.

Deposit timing and escrow

Your contract will state when the deposit is due. In many Williamson County deals, buyers deliver funds upon ratification or within a short window, often 24 to 72 hours after execution. The exact deadline is set in the contract.

A title company or closing attorney usually holds the earnest money in escrow. Your contract should specify the escrow holder, contact information, delivery method, and acceptable funds, such as wire, certified funds, or check. Keep written confirmation of delivery and receipts.

Funds are released at closing or according to the contract. If a dispute arises, the escrow holder typically requires a mutual written release or a court order before disbursing contested funds.

Contingencies and refund rules

Whether your deposit is refundable depends on the contingencies and deadlines in your contract. Common contingencies include:

• Inspection: You can usually negotiate repairs or terminate within the inspection period as stated. If you terminate within that window, the deposit is typically refundable.
• Financing: If you cannot obtain financing within the stated period and you follow the notice requirements, the deposit is usually refundable.
• Appraisal: If the appraisal comes in low, the contract outlines options, such as renegotiation, appraisal gap coverage, or termination with a refund if allowed.
• Title: Unresolved title issues may allow termination with a refund per the contract.

If you default without a contractual right to terminate, the seller may claim the earnest money per the agreement. On a successful closing, your deposit is credited to your funds to close.

Earnest money vs due diligence fees

Earnest money is held in escrow and is usually refundable if you terminate under valid contingencies. In some markets, buyers also pay a separate due diligence or nonrefundable fee directly to the seller for the right to inspect during a defined period. That fee is often not refundable.

In Tennessee, earnest money deposits are the standard approach. Separately labeled nonrefundable fees are not routine here, but they can be negotiated. If a seller requests nonrefundable consideration or asks that the deposit be nonrefundable, make sure the language is clear in the contract and that you understand the added risk.

Structure your deposit to win

You can strengthen your offer without overextending. Focus on the overall package, not just the deposit size.

• Include a current lender pre-approval and proof of funds for the deposit.
• Propose a closing timeline that fits the seller’s needs.
• Keep contingency windows reasonable and focused. Shorten where you can, but do not waive blindly.
• Deliver the deposit quickly, with clear written instructions and confirmation.

Amount guidelines by price tier

These are local heuristics, not rules. Use recent comps and current competition as your guide.

• Low to mid-priced homes: consider $5,000 to $10,000 when competition is modest.
• Typical Brentwood transactions: $10,000 to $25,000 or 1 to 2% is often viewed as meaningful.
• Higher priced or luxury properties: $25,000+ or 1 to 3%, with some buyers offering more in intense competition.

Timing and delivery tips

• Ask your agent to confirm the escrow holder and delivery instructions in writing.
• Use traceable funds, such as wire or certified funds, and keep receipts.
• Aim to fund within the first 24 to 48 hours after ratification if your contract allows, and communicate promptly when sent.

Risk management for buyers

Protect your deposit by following the contract closely. Preserve inspection and financing contingencies unless you clearly understand the risks of waiving them. If you shorten deadlines, build in time to complete inspections and lock financing steps.

Keep the deposit with a neutral escrow holder, such as a title company, not a seller-controlled account. Confirm who can release funds and under what conditions. If there is a disagreement about the deposit, expect the escrow holder to hold funds until both parties sign a release or a court issues an order.

What sellers should evaluate

A larger deposit can be a positive signal, but it is only one part of the picture. Look at the buyer’s financial strength, financing terms, contingency lengths, appraisal plan, and closing timeline. Quick deposit delivery and clean documentation often indicate a prepared buyer.

If a buyer offers a nonrefundable payment, weigh the benefit against the risk of delays or complications. Clear contract language helps avoid disputes later.

Step-by-step checklist

• Get pre-approved and verify your liquid funds for the deposit.
• Discuss deposit strategy, contingency windows, and timeline with your agent.
• Confirm the escrow holder in writing and obtain delivery instructions before the offer is signed.
• Submit a complete, clean offer with your deposit plan and pre-approval attached.
• Fund the deposit within the contract deadline, and keep proof of delivery.
• Track contingency deadlines and provide timely notices if you need to renegotiate or terminate under the contract.

Common pitfalls to avoid

• Offering a very small deposit in a competitive situation without compensating terms elsewhere.
• Missing the deposit deadline or contingency notice deadlines stated in the contract.
• Waiving inspection or financing without a clear plan or budget for potential issues.
• Agreeing to nonrefundable terms without understanding the risks and trade-offs.

Final thoughts

In Brentwood, a thoughtful earnest money strategy can make your offer stand out while keeping your risk in check. Align the deposit amount, timing, and contingencies with your price point and the level of competition. Most important, follow the contract deadlines closely and keep your funds in neutral escrow.

If you want help tailoring a deposit strategy to your price range and target neighborhood, connect with Zeitlin Sotheby’s International Realty. Let’s talk about your next move.

FAQs

How much earnest money is typical in Brentwood?

• Local practice ranges from a few thousand dollars to about 1 to 3% of the purchase price, depending on price tier and competition.

When is the earnest money due after offer acceptance?

• Your contract controls the deadline. Many deals require delivery upon ratification or within about 24 to 72 hours of execution.

Who should hold the earnest money in Tennessee?

• A neutral escrow holder, most commonly a title company or closing attorney named in the purchase agreement.

When can a buyer get the deposit back?

• If you terminate within valid contract contingencies, such as inspection, financing, appraisal, or title, and meet all notice requirements.

Can a seller keep the deposit if a buyer simply changes their mind?

• If the buyer defaults outside the contract’s termination rights, the seller may claim the earnest money per the agreement’s remedies.

Is earnest money the same as a due diligence fee?

• No. Earnest money is escrowed and often refundable under contingencies. A due diligence or nonrefundable fee is typically paid to the seller and is not standard in Tennessee but can be negotiated.

What happens if there is a dispute over the deposit?

• The escrow holder usually requires a mutual written release or a court order to disburse contested funds, per the contract’s dispute resolution terms.