Earnest Money in New Hampshire: A Pembroke Buyer’s Guide

Putting money down before you even own the home can feel risky. If you are buying in Pembroke or greater Merrimack County, you want to know exactly how earnest money works and how to protect it. This guide breaks down typical deposit amounts, who holds the funds, and the contingencies that safeguard your money. By the end, you will know what is customary locally and the steps to keep your deposit secure. Let’s dive in.

Earnest money basics in NH

Earnest money is a good-faith deposit that you include with your offer or shortly after both parties sign the purchase and sale agreement. It shows the seller you are serious and ready to move forward. If the transaction closes, your deposit is applied to your down payment or closing costs.

In New Hampshire, earnest money is typically held in escrow by one of the following: the listing broker in a trust account, a title company, a closing or escrow agent, or an attorney for one of the parties. The purchase and sale agreement should name the escrow holder clearly.

You should receive a written receipt that shows the amount, who is holding the funds, and the date received. The contract will also outline when the deposit must be delivered and how it can be released if the deal is canceled or completed.

Who holds your deposit

Escrow holders in local practice include the listing brokerage’s trust account, a title company, or a closing attorney. Your contract should specify the exact party. Ask your agent to confirm the payee and delivery method before you move funds.

Receipts and deadlines

Get written confirmation when the deposit is made. The agreement should set the deposit deadline, often within a few business days of acceptance. It should also define the conditions for release, such as a mutual written release or a court or arbitration order.

Typical amounts in Pembroke

Across many markets, earnest money often ranges from about 1 to 3 percent of the purchase price. For lower-priced homes, buyers sometimes offer a flat amount, such as 1,000 to 5,000 dollars. In a more competitive market, sellers may expect higher deposits.

In Pembroke and Merrimack County, the exact number depends on current competition and price point. Your agent will advise you on today’s local norms, such as whether multiple offers are common and how deposit size plays into a stronger offer.

Local examples (illustrative)

• Example A: On a single-family home around 300,000 dollars, buyers often offer 2,000 to 5,000 dollars, or roughly 1 percent as a reference point.
• Example B: On homes around 500,000 dollars or higher, buyers may offer 5,000 to 15,000 dollars, or about 1 to 2 percent or more depending on competition.

These are illustrative examples. Your strategy should match the specific property, market conditions, and your comfort level.

Market conditions affect size

In a tight market, sellers may prefer larger deposits and faster timelines. In a buyer’s market, smaller deposits can be acceptable. Balance the desire to stand out with the need to limit risk if the deal does not close.

Protect your deposit with contingencies

Contingencies are your primary protection. They give you defined time to complete key steps and, if needed, to cancel while keeping your deposit when you follow the contract terms.

Inspection contingency

An inspection contingency lets you hire professionals to evaluate the home. If the inspection reveals issues you are not willing to accept, you can terminate within the inspection window as the contract outlines. When you follow the notice steps on time, your earnest money is typically refundable.

Financing and appraisal protections

A financing contingency protects you if you cannot obtain your mortgage by the stated deadline. If your lender declines or terms are not met and you terminate properly within the timeframe, your deposit is usually returned. An appraisal contingency helps if the appraised value comes in below the contract price and no remedy is reached. If you end the contract under the appraisal terms and on time, you can generally keep your deposit.

Title and home-sale contingencies

A title contingency applies if there are title defects that cannot be fixed as the contract allows. If termination is permitted for uncured title problems, your deposit is refundable. If your offer includes a sale-of-home contingency and you follow the notice and timing requirements but cannot sell in time, your deposit can be released back to you.

When deposits are at risk

Your deposit is most at risk if you remove contingencies and later cannot or choose not to close. Missing a deadline without proper notice can also put the funds at risk. In those cases, the seller may keep the earnest money as liquidated damages or pursue other remedies as the contract allows.

If you terminate outside a contingency period or without following the contract’s notice rules, you can lose protection. Track every date and keep your notices in writing to stay covered.

Deadlines and written notices

Contracts set specific timeframes to complete inspections, secure financing, and address appraisal or title items. When a contingency is removed in writing, or a deadline passes without action, you usually lose the ability to rely on that contingency. Use the contract’s notice method, such as email with read receipt, and keep confirmations.

Disputes and refunds

If there is a disagreement about who gets the deposit, most contracts require a mutual written release, mediation, arbitration, or a court order before funds are disbursed. If the escrow holder is uncertain, they typically hold the funds until both parties agree in writing or a legal resolution directs the release.

Real-world scenarios

• Scenario 1, refundable: You deposit 5,000 dollars and complete your inspection within 10 days. The inspection uncovers significant structural issues. You terminate within the inspection window per the contract. Your deposit is refunded.
• Scenario 2, forfeiture risk: You waive the inspection contingency to be more competitive. Later, you decide not to move forward for personal reasons. Without a contract excuse, the seller may keep your earnest money or pursue other remedies allowed in the agreement.

Step-by-step checklist

• Before you offer

  • Ask your agent what deposit size is customary in Pembroke right now and how fast it must be delivered.
  • Confirm acceptable payment types, such as personal check, certified check, wire transfer, or escrow check, and confirm delivery instructions.

• When drafting your contract

  • Specify the exact deposit amount and payment form.
  • Name the escrow holder clearly, such as a title company, closing attorney, or broker trust account.
  • Set the deposit deadline, for example within three business days of acceptance.
  • Include contingencies with clear timelines and termination procedures. Common examples are inspection, financing, appraisal, title, and sale of buyer’s home.
  • Spell out how earnest money can be disbursed, such as by written mutual release or by court or arbitration order.
  • Note if escrow funds may earn interest and who receives it, based on state or local rules.
  • Clarify remedies for breach, such as liquidated damages or the seller’s right to retain the deposit.

• During contingency periods

  • Get a written receipt for your deposit and keep proof from your bank or the escrow holder.
  • Track all deadlines and deliver notices on time in the form the contract requires.
  • If you request repairs or credits, do so in writing within the inspection window.

• At closing or if canceling

  • At closing, your earnest money should be credited to your closing costs or down payment.
  • If you cancel under a contingency, follow the contract steps to request your refund.
  • If the seller objects, consult your agent and attorney. Many disputes are settled through the contract’s dispute-resolution process.

Why local guidance matters

Deposit norms shift with the market, and Merrimack County can vary by price point and property type. A local buyer’s agent will help you weigh a strong deposit against your risk tolerance and the protections you need. That balance helps you compete while keeping your money safe if the deal does not proceed.

Start your Pembroke purchase

If you want help setting the right deposit, writing clean contingency language, and tracking deadlines, you are not alone. Our team works with buyers across Pembroke and central New Hampshire to craft confident, competitive offers. For a one-on-one plan tailored to your goals, connect with Allison Driscoll today.

FAQs

What is earnest money in NH?

• It is a good-faith deposit you make with your offer that is applied to your closing costs or down payment if the sale closes.

How much earnest money is typical in Pembroke?

• It depends on price and competition, but many buyers use about 1 to 3 percent or a flat amount such as 2,000 to 5,000 dollars for modestly priced homes.

Who holds the deposit and when do I pay?

• The contract names the escrow holder, often a title company, closing attorney, or broker trust account, and it sets the delivery deadline.

Which contingencies protect my deposit?

• Common protections include inspection, financing, appraisal, title, and a sale-of-home contingency if included in your offer.

What happens if I miss a deadline?

• If you miss a contingency window or remove a contingency, you may lose that protection and put your deposit at risk.

Can the seller keep my deposit if I cancel for a valid reason?

• If you terminate within a contingency period and follow the contract notice rules, your deposit is typically refunded.

How are deposit disputes resolved?

• Contracts often require a mutual written release or use mediation, arbitration, or court. The escrow holder may hold funds until there is a written agreement or legal order.