Are you wondering how much earnest money you need in Southern Highlands and what happens to it if plans change? You are not alone. Earnest money is a key part of your offer, yet most buyers and sellers only see it a few times in their lives. In this guide, you will learn what earnest money is, how it works in Nevada, and how to protect it from offer to closing. Let’s dive in.
What earnest money is
Earnest money is a buyer’s good‑faith deposit that accompanies a purchase agreement. It shows the seller that you intend to complete the purchase. It is not the same as your down payment or closing costs, though it is usually credited toward what you owe at closing.
In Nevada, the purchase contract sets the rules. The agreement states how much you will deposit, who holds it, when it is due, which contingencies protect it, and what happens if either side defaults. A neutral escrow or title company typically holds the deposit and disburses it according to written instructions.
Typical amounts in Southern Highlands
There is no one-size amount. In many Nevada transactions, buyers offer about 1% to 3% of the purchase price as earnest money. Lower-priced or less competitive situations may see deposits of $1,000 to $3,000.
Southern Highlands is a desirable, master-planned community in Clark County. When listings attract multiple offers, buyers sometimes increase the deposit to strengthen their position. For example, 1% on a $500,000 home is $5,000. On a $350,000 home, 1% is $3,500.
Your amount is negotiable. Consider price point, competition, and your comfort with risk. Larger deposits can signal strength but place more funds at risk if you later default outside of contingency protections.
When you deposit and who holds it
Most Nevada purchase agreements require you to deliver the earnest money shortly after both parties sign the contract, commonly within 1 to 3 business days. The contract names where to send it, often a title or escrow company. Sometimes an additional deposit is due later, such as after inspections or loan approval. Watch your exact deadlines.
Always follow the delivery instructions in the contract and get a written receipt from escrow or the listing broker, depending on who is named to hold the funds.
Offer-to-closing timeline
Offer accepted → Buyer deposits EMD → Inspection period → Negotiations/cancellations by deadline → Financing/appraisal period → Clear-to-close → Closing (EMD applied)
Day 0: Offer accepted; deliver EMD within contract days (often 1–3 business days)
Day 1–10: Inspection period (common window)
Day 1–30: Financing and appraisal period (varies by contract)
Day 30–45: Clear to close; final walk-through and closing
Closing: EMD credited to buyer’s funds due; if dispute, escrow holds funds until resolution
Contingencies that protect your deposit
Contingencies are contract conditions that give you time to investigate and cancel if needed. These often include inspections, financing, appraisal, HOA document review in planned communities, and title review. When you act within these timelines and follow the notice procedures, your earnest money is usually refundable.
Refundable situations
- You cancel during the inspection period as allowed in the contract.
- Your lender denies the loan within the financing contingency period and you provide the required written denial and notices.
- Title or CC&R issues are not cured, and you cancel within the title objection window.
- HOA documents reveal rules or costs you find unacceptable, and you cancel within the review period stated in the contract.
At-risk situations
- You waive inspection or financing contingencies and later cancel for reasons covered by those protections.
- You fail to deliver written notices on time, even if your reason would have been valid within the timeline.
- You default after contingencies expire. In many Nevada contracts, a liquidated damages clause may allow the seller to keep the earnest money.
Liquidated damages basics
Many Nevada purchase agreements include a liquidated damages clause. This can limit the seller’s remedy to the earnest money if you default, rather than opening the door to wider damage claims. Whether it applies depends on the exact contract language. Ask your agent to explain how it works in the form you are using.
How escrow handles disputes
Escrow is a neutral holder. They disburse funds only according to written instructions that match the contract. If both parties agree in writing to release the deposit, escrow can release it. If the parties disagree, escrow typically holds the funds until there is a mutual release, a court order, or an award from mediation or arbitration, depending on the contract.
In some cases, escrow may file an interpleader, which asks a court to decide who gets the funds. This process adds time and may add costs. Clear, timely notices and good documentation help avoid disputes.
Examples to make it real
- Example A: Purchase price $350,000 with a $3,500 earnest money deposit (about 1%). You have a 10-day inspection period and a 30-day financing contingency. You cancel within the inspection period due to a major defect and follow the contract’s notice rules. Your earnest money is typically refunded.
- Example B: Purchase price $600,000 with a $12,000 deposit (2%) in a competitive situation. You shorten inspections to 7 days but keep a 21 to 30-day financing contingency. If your lender denies the loan within that window and you provide the required denial and notices, your deposit is usually refundable. If you had waived financing and the loan failed, the deposit would likely be forfeited.
First-time buyer checklist
- Read the full contract and addenda. Highlight your earnest money amount and delivery deadline.
- Confirm the escrow or title company details and get a written receipt for your deposit.
- Calendar all contingency deadlines: inspection, HOA review, financing, appraisal, and title.
- Schedule inspections immediately. Keep reports and any objections in writing.
- Stay close to your lender. If financing fails, obtain a written denial promptly.
- Understand the risk of waiving contingencies before you do it.
- Keep copies of all notices, including cancellation notices.
- Ask your agent to explain the liquidated damages clause and dispute steps.
- Before closing, confirm how the deposit will be credited to your funds so you know your final cash to close.
Tips for sellers in Southern Highlands
- Request a clear earnest money amount and a short deposit timeline in the offer. Larger or faster deposits can signal buyer commitment.
- Review contingencies and deadlines. Shorter timeframes may reduce uncertainty but must be realistic for inspections and loan approvals.
- Understand your contract’s liquidated damages clause. It often defines the remedy if the buyer defaults.
- Work with your agent and escrow to ensure the deposit is delivered on time and receipts are obtained. Keep a clear paper trail.
Common pitfalls to avoid
- Assuming there is a standard amount. Earnest money is negotiated and depends on market conditions.
- Missing delivery instructions or failing to get a receipt. Always follow the contract and document everything.
- Letting deadlines slip. Late notices can put your deposit at risk, even for valid concerns.
- Waiving protections without understanding the risk. Removing contingencies can strengthen an offer but increases exposure.
- Ignoring HOA documents. In planned communities, review fees, rules, and policies during your contract window.
Work with a local team you trust
In Southern Highlands and across Clark County, the purchase contract and escrow instructions guide every step of earnest money. Your best protection is simple: choose a knowledgeable local team, track deadlines, deliver funds correctly, and keep your notices in writing. If you want a clear plan from offer to closing, with concierge-level coordination and local insight, connect with The Gorton Group.
FAQs
When is earnest money due in Nevada?
- The purchase contract sets the deadline. It is commonly due within 1 to 3 business days after both parties accept the offer.
Who holds the earnest money deposit?
- A neutral escrow or title company usually holds it, though some contracts name the listing broker’s trust account.
Can the seller use my deposit before closing?
- No. Escrow holds the funds and can only release them with mutual written instructions, a court order, or as the contract allows at closing.
What if I cancel during inspections?
- If you cancel within the inspection period and follow the contract’s notice rules, the deposit is usually refundable.
What happens if my loan is denied?
- If denial occurs within the financing contingency period and you provide the required written denial and notices, the deposit is commonly refundable.
How are earnest money disputes resolved?
- Escrow holds the funds until both parties agree in writing, the dispute is resolved by mediation or arbitration per the contract, or a court orders release (interpleader is possible).
