Are you worried about losing money if your home purchase falls through? You are not alone. Earnest money can feel confusing when you are writing an offer in North Dakota, especially if you are relocating or buying in a fast-moving Western ND market. In this guide, you will learn what earnest money is, how much to expect, when it is refundable, and how to protect your deposit from disputes. Let’s dive in.
What earnest money means
Earnest money is a deposit you make with your offer to show the seller you are serious. The seller usually agrees to take the home off the market while everyone works through inspections, financing, appraisal, and title checks. The funds sit in a neutral escrow or trust account until closing or until release under the contract.
This deposit protects both sides. It gives the seller confidence you will follow through. It gives you a path to recover your money if a contingency is not met and you follow the contract rules. The exact terms live in your signed purchase agreement.
Typical earnest money in North Dakota
Across many U.S. markets, earnest money often falls around 1 to 3 percent of the purchase price. For lower-priced homes, you may see flat deposits between $500 and $5,000. In higher price ranges or in multiple-offer situations, buyers sometimes offer 3 to 5 percent or more to stand out.
In Western North Dakota communities like Williston, Dickinson, Watford City, and Minot, amounts can shift with market cycles. When demand runs high and inventory is tight, larger deposits are more common. In slower periods or for modest-priced homes, smaller flat deposits may be acceptable. Your agent should help you match the deposit to current local conditions.
How the deposit is handled
Your offer will state the deposit amount and who will hold it. In North Dakota, a title or escrow company, an attorney, or the listing broker’s trust account may hold the funds based on the contract. The holder should provide a written receipt that records the amount, date, and account holder.
Most contracts require you to deliver the earnest money soon after acceptance, often within 24 to 72 hours. You can usually pay by cashier’s check, certified check, wire transfer, or electronic escrow deposit. Personal checks may be allowed but can delay clearing, which some sellers want to avoid.
Always verify wire instructions directly with the escrow company by phone. This is a simple way to reduce wire fraud risk.
When earnest money is refundable
Your refund rights depend on the contingencies in your contract and how well you follow deadlines and notice rules. Common contingencies that protect your deposit include:
- Inspection contingency. You can cancel within the inspection period if the home does not meet your expectations and the contract allows it.
- Financing contingency. If you cannot obtain lender approval by the agreed date and follow the contract’s notice steps, your deposit is typically refundable.
- Appraisal contingency. If the home does not appraise for the purchase price and you cannot reach a solution with the seller as allowed by the contract, you may cancel and recover the deposit.
- Title or survey issues. Unresolved title defects or uninsurable title can allow you to cancel.
- Home sale contingency. If your contract includes it and your current home does not sell by the deadline, you may be able to cancel under that clause.
To preserve your rights, submit notices in writing before the deadlines. Keep copies of all inspection reports and lender communications.
When your deposit is at risk
Your earnest money may be at risk if you withdraw for reasons not covered by your contingencies or you breach the contract. Common examples include missing a deadline without an agreed extension, failing to deliver the deposit on time, or not closing without a contractual reason. If your contract contains a liquidated damages clause, the seller may be allowed to keep the deposit if you default.
If the seller defaults, you may be entitled to a return of the deposit and other remedies your contract allows. Review the signed agreement for the exact default and remedy language.
Key timelines in ND offers
Timelines vary by transaction and contract, but you will often see:
- Earnest money delivery within 24 to 72 hours of acceptance.
- Inspection period around 5 to 10 business days after acceptance.
- Financing approval within 21 to 30 days in many financed purchases.
- Appraisal resolution within about 7 to 14 days after the appraisal is ordered.
- Closing in 30 to 45 days for many financed sales, with cash or investor deals often faster.
Treat these as planning guides. Your signed purchase agreement controls the actual dates.
Clauses to review before you sign
Before you submit or accept an offer, pay close attention to:
- Who holds the earnest money and their contact information.
- Deposit amount and delivery deadline.
- Inspection, financing, and appraisal deadlines and notice requirements.
- Liquidated damages versus other seller remedies on buyer default.
- How the escrow holder may release funds if there is a disagreement.
Small wording differences can have big effects. Ensure you understand your remedies and obligations in each clause.
Buyer checklist in Western ND
- Get pre-approved and include your lender letter with the offer.
- Choose a deposit amount that fits price, competition, and risk. Many buyers start around 1 percent, then adjust for market conditions.
- Confirm where the funds will be held and how you will pay. Obtain a written escrow receipt.
- Calendar every deadline. Submit inspection objections and financing notices in writing and on time.
- In competitive submarkets tied to energy or employment spikes, consider a stronger deposit or proof of funds to signal commitment.
Seller checklist in Western ND
- Require that earnest money be held by a reputable local escrow or title company or a broker trust account.
- In multiple-offer situations, consider requesting a larger deposit and verify pre-approval or proof of funds.
- Understand your default remedies and whether your contract uses a liquidated damages clause. Consult counsel if unsure.
- Use clear release procedures to prevent escrow disputes and delays.
Handling disputes and releases
Escrow holders release funds only as allowed by the contract, by mutual written instruction, or by court or arbitration order. If you and the other party cannot agree, the holder may refuse release until it receives proper authority. Keep thorough records of receipts, emails, inspection reports, and lender updates to support your position if a dispute arises.
Local context in Western North Dakota
Markets in Williston, Dickinson, Watford City, and Minot can change quickly as oil and employment conditions shift. During high-demand periods, sellers may expect larger deposits and tighter timelines. In slower stretches, sellers may consider more modest deposits. Your strategy should reflect current local MLS activity and the price band you are shopping or selling in.
Protect your deposit
- Put every agreement in writing and sign addenda for any changes.
- Verify wire instructions directly with the escrow holder by phone.
- Meet each deadline, and submit notices before the cutoff times.
- Save copies of all documents and communications.
- Ask your agent to confirm receipt of deposit and any notices in writing.
Work with a trusted local team
A clear, well-structured offer puts you in control and reduces stress. When you understand earnest money and the local timeline, you can write stronger offers and avoid disputes. If you want experienced, detail-focused guidance across Western North Dakota, partner with a team that blends concierge service with legal sophistication.
Ready to move forward with confidence? Connect with Sandra West to map your strategy and protect your interests from offer to closing.
FAQs
What is earnest money in a North Dakota home purchase?
- It is a good-faith deposit you provide with an offer that is held in escrow until closing or release under the contract, signaling to the seller that you are serious.
How much earnest money do buyers usually put down in Western ND?
- Many buyers use about 1 to 3 percent of the purchase price, with $500 to $5,000 common for lower-priced homes and higher percentages in competitive markets.
When do I have to deliver the earnest money after offer acceptance?
- Most contracts require delivery within 24 to 72 hours after acceptance, using a cashier’s check, certified check, wire transfer, or approved electronic deposit.
Can I get my earnest money back if the inspection is unsatisfactory?
- Yes if your contract includes an inspection contingency and you provide written notice within the inspection period according to the agreement.
What happens to earnest money if my financing falls through?
- If you have a financing contingency and follow the notice and timing rules, the deposit is typically refundable when lender approval cannot be obtained by the deadline.
Who decides when the escrow holder can release the deposit?
- Release happens per the written contract, mutual written instructions from both parties, or an order from arbitration or a court if there is a dispute.
