Thinking about making an offer on a home in Greensburg? You will hear the term “earnest money” right away, and it can feel confusing. This deposit shows a seller you are serious, but it also comes with rules and deadlines that protect you only if you follow them. In this guide, you will learn how earnest money works in Pennsylvania, what is typical in Westmoreland County, and the steps that keep your deposit safe. Let’s dive in.
Earnest money basics in Pennsylvania
Earnest money, sometimes called an earnest money deposit or EMD, is a buyer’s deposit paid when a purchase agreement is signed. It shows the seller your offer is made in good faith. If the sale closes, the money is credited toward your purchase price or closing costs at settlement.
In Pennsylvania, how your deposit is handled is set by your contract and by general contract law. Many transactions use the Pennsylvania Association of Realtors standard purchase agreement. That contract lays out who holds the funds, when you must deposit them, which contingencies apply, and what happens if either party defaults. Earnest money is not insurance. Whether you get it back depends on the specific contingencies and the timing of your actions under the contract.
How much earnest money in Greensburg?
Across many markets, buyers often put down about 1 to 3 percent of the purchase price. In Western Pennsylvania and around Greensburg, deposits for entry- to mid-priced homes often run $1,000 to $5,000, or roughly 1 percent of the price. For higher-priced properties, the dollar amount increases and can be 1 percent or more.
You may raise your deposit in a multiple-offer situation to strengthen your offer. Just remember that larger deposits carry more risk if you later miss a deadline or waive a key contingency. Your agent can help you balance strength and safety for current local conditions.
Who holds your deposit and how escrow works
Your contract will name the escrow holder. In Pennsylvania, the holder is commonly a title or settlement company, a real estate attorney, or sometimes a broker’s escrow account. The holder must follow the contract’s written instructions for releasing funds.
Once your offer is accepted, the contract will give you a specific window to deliver the deposit, often 24 to 72 hours or a few business days. You will pay by check, cashier’s check, or wire transfer to the party named in the contract or escrow instructions. Always request a written receipt from the escrow holder that shows the amount, date, and the property address or contract reference.
At closing, your earnest money is credited on the settlement statement and applied to your costs. If the sale does not close, the release of your deposit depends on the contract terms and how contingencies were handled.
Key timelines and deadlines to track
- Deposit deadline: often 24 to 72 hours after acceptance.
- Inspection period: usually 5 to 10 business days to complete inspections and either request repairs or terminate under the inspection contingency.
- Financing contingency: commonly 21 to 30 days to secure a loan commitment. Some loans need 30 to 45 days.
- Appraisal: typically ordered early in the loan process. If the appraisal is low and your contract allows, you can renegotiate or terminate.
- Title review: raise any title objections within the contract’s stated period.
- Closing date: often 30 to 60 days from acceptance, depending on lender and parties.
Missing a deadline can waive your rights under that contingency and put your deposit at risk. Put the dates on your calendar and confirm each step in writing.
When you can get your money back
Several common scenarios lead to a refund, as long as you act within the contract timelines:
- You terminate during a valid inspection period, following the contract’s notice requirements.
- Your financing is denied within the financing contingency window, and you provide the required proof to terminate.
- The appraisal is low and your contract includes an appraisal contingency that allows termination.
- The seller defaults or refuses to close. In most cases, you are entitled to a refund and may have additional legal remedies based on the contract.
When your deposit is at risk
Your earnest money can be at risk if you fail to close without a contractual reason after contingencies are removed or deadlines are missed. Many contracts allow the seller to keep the deposit as liquidated damages if the buyer defaults, but it depends on the exact language.
If there is a dispute over the release of funds, the escrow holder may require a written release signed by both parties, or a court order, before disbursing the money. Some contracts have specific dispute resolution steps. Expect delays if the parties do not agree on the outcome.
Simple examples for clarity
- $150,000 purchase price: 1 percent is $1,500. 2 percent is $3,000.
- $300,000 purchase price: 1 percent is $3,000. 2 percent is $6,000.
- Buyer terminates within a valid inspection period with proper notice: deposit usually refunded.
- Buyer misses the financing deadline, then cannot get a loan and cannot close: deposit may be forfeited if the contract allows.
A step-by-step checklist for Greensburg buyers
Before you write an offer:
- Choose a deposit amount that fits local norms and your risk comfort. Discuss the pros and cons with your agent.
- Decide which contingencies you will include, such as inspection, financing, appraisal, clear title, or sale of your current home.
After your offer is accepted:
- Confirm who will hold the earnest money and how to deliver it. Get the holder’s legal name, address, and phone number.
- Follow the exact deposit method in the contract. If wiring, verify instructions by phone using a known number.
- Get a written receipt from the escrow holder showing the amount and deposit date. Keep your bank or wire confirmation too.
During the contract period:
- Track every deadline in writing. Schedule inspections immediately to stay within the window.
- Communicate inspection requests or termination in the form and timeline the contract requires.
- Stay in close touch with your lender. Get your mortgage documents submitted early to meet the commitment date.
If issues arise:
- If you plan to terminate under a contingency, deliver written notice before the deadline and keep proof of delivery.
- If a dispute develops, contact your real estate attorney or your agent for next steps. In Pennsylvania, title companies and attorneys often help resolve escrow questions.
Protect yourself from wire fraud
- Always verify wiring instructions by calling the escrow holder at a known, trusted phone number. Do not rely only on email.
- Confirm the payee’s legal name and account details before sending funds.
- Be cautious with last-minute changes. If you receive new wiring instructions by email, assume it could be a scam until verified by phone.
- Do not share sensitive banking information over unsecured channels.
Final thoughts
Earnest money is a small part of your total purchase, but it carries big importance. In the Greensburg market, a clear plan for your deposit, tight tracking of deadlines, and careful escrow steps can protect your money and strengthen your offer. With a local guide, you can put down a confident deposit and keep your rights intact.
If you want personal guidance on the right deposit amount, the best contingencies, and a safe path to closing, connect with Donna Tidwell, Berkshire Hathaway. You will get calm, experienced support from offer to keys in hand.
FAQs
What is earnest money in a Pennsylvania home purchase?
- It is a buyer’s deposit paid with a signed contract to show good faith and is credited to your purchase price or closing costs at settlement.
How much earnest money is typical in Greensburg?
- Many entry- to mid-priced homes use $1,000 to $5,000, often around 1 percent of the price, with higher amounts for higher-priced or more competitive situations.
Who usually holds earnest money in Pennsylvania?
- A title or settlement company, a real estate attorney, or sometimes a broker’s escrow account named in the contract.
When do you have to pay the earnest money?
- Most contracts require deposit within 24 to 72 hours after the seller accepts your offer, or within a few business days as specified.
Can you get earnest money back if financing falls through?
- Yes, if your contract includes a financing contingency and you terminate within the stated deadline with proper documentation.
What happens if the appraisal is low?
- If your contract includes an appraisal contingency, you can renegotiate with the seller or terminate within the allowed window for a refund.
What if the buyer and seller disagree about the release of earnest money?
- The escrow holder may require a mutual written release or a court order, and funds may remain in escrow until the dispute is resolved.
Is earnest money the same as a down payment?
- No. It is a separate deposit held in escrow that is later credited at closing, while your down payment is the larger amount you bring to complete the purchase.
