Are you wondering how earnest money really works when you buy a home in Hurricane? You are not alone. This part of the offer can feel confusing, especially if it is your first time. In a few minutes, you will know what earnest money is, how Utah’s purchase contract treats it, typical deposit ranges in Washington County, and the deadlines that protect your refund. Let’s dive in.
What earnest money is
Earnest money is the good‑faith deposit you include with your offer to show you are serious about buying. It is not an extra fee. If the sale closes, the deposit is applied to your cash due at closing, such as your down payment or closing costs.
Under common Utah practice, the Residential Real Estate Purchase Contract (REPC) states who will hold the deposit and when it must be delivered. The funds are typically placed with a title or escrow company or the listing broker’s trust account. The REPC outlines how the money can be released and the conditions for refund or forfeiture.
If your purchase closes, your earnest money is credited at settlement. If you cancel within a valid contingency, the REPC explains how your deposit is returned. If you default after contingencies are removed or deadlines have passed, the seller may have remedies that can include keeping the deposit as liquidated damages or pursuing other contract remedies.
How Utah’s REPC handles it
Where it appears in the contract
The REPC includes a line for the earnest money amount and a clause that names the holder, usually a title company or the listing brokerage. It also includes the delivery deadline for your deposit.
Your delivery deadline
Most Utah offers set delivery within a few business days of mutual acceptance, often 1 to 3 business days. Your exact deadline is whatever your signed contract states. Meeting this timeline matters, because missing it can put you in technical default.
Who holds and releases funds
Title and escrow companies or brokerage trust accounts must follow state rules for handling client funds. Unless the contract allows for a release, escrow holders typically need written instructions signed by both parties or a court order to disburse the money. If there is a dispute, the funds may remain in escrow until the parties agree or a court decides.
What happens at closing or cancellation
- If the deal closes, the deposit is credited to you at settlement.
- If you cancel within a valid contingency and follow the REPC notice steps, your deposit is refundable.
- If you fail to perform after contingencies are removed or deadlines expire, the seller may be entitled to keep the deposit under the REPC’s remedies section.
Key deadlines to track
These windows can vary by deal, but here are common timelines seen in Utah. Your contract controls.
- Earnest money delivery: often 1–3 business days after acceptance.
- Inspection period: often 7–15 calendar days to inspect and request repairs or terminate.
- Financing deadline: commonly 21–30 days to secure loan approval.
- Appraisal deadline: often aligned with the financing deadline or stated separately.
- Title and HOA document review: often 3–7 days after you receive the documents.
- Closing date: when funds and deed are exchanged and your deposit is credited.
Pro tip: Put every deadline on your calendar with reminders. Missing a notice date is one of the most common ways buyers lose refund rights.
Refunds vs. forfeiture
When you get a refund
You can typically recover your earnest money when you follow the REPC and cancel within a contingency period or due to seller default. Common refundable situations include:
- Inspection contingency. You inspect, deliver a repair request or termination notice within the inspection window, and cancel per the contract.
- Financing contingency. You cannot obtain financing and cancel within the financing period, following the REPC’s documentation requirements.
- Appraisal contingency. The appraisal comes in below the price, your lender will not fund, and you cancel within the deadline.
- Title issues. Clear title cannot be delivered and you cancel per the title contingency timeline.
- Seller default. The seller refuses to perform. You may be entitled to a refund and other remedies.
Example A: Refund. You inspect on Day 2, discover major foundation issues, and send a termination notice before the inspection deadline. Under the REPC, your earnest money is refunded.
When you could lose it
You risk forfeiture if you breach after protections are removed or you miss a required notice. Common risk scenarios include:
- You remove the inspection contingency and later try to cancel for inspection-related reasons.
- You miss the financing or appraisal deadline, then cancel for financing reasons after the window closes.
- You simply decide not to close for a non‑contract reason after contingencies are satisfied.
- You fail to deliver your earnest money by the contract’s deadline.
Example B: Forfeiture risk. Your inspection finds issues, but you do not send a repair request or termination before the deadline. You later refuse to close. The seller may claim the deposit as liquidated damages.
Documentation that matters
- Written termination or repair notices with delivery timestamps.
- Lender denial letters or conditional approvals.
- Inspection reports and notice forms sent within the inspection window.
- Title objections and related correspondence.
- Any signed addenda or mutual releases.
Keeping clean records proves you acted within the contract and helps speed up a refund.
Hurricane deposit amounts
Earnest money in Hurricane and the greater Washington County market is market‑driven. In stronger seller markets, buyers often offer larger deposits to stand out. Typical patterns include:
- Lower‑competition or lower‑priced homes: often $1,000 to $3,000.
- Mid‑range purchases: commonly 1% to 2% of the purchase price.
- Competitive offers or higher‑priced homes: sometimes 3% to 5% or a larger fixed amount, such as $10,000 or more.
These are general ranges. Washington County has seen periods of strong demand, and norms can shift by season, neighborhood, and price point. Always align your deposit with current local conditions, your risk tolerance, and your ability to meet deadlines.
How to choose your amount
- Consider the price point and competition level.
- Balance a stronger deposit with the protections you will keep in the contract.
- Avoid waiving key contingencies unless you fully understand the risk.
- Confirm the holder and delivery instructions so you can fund on time.
Buyer protections: contingencies
Contingencies give you time to check the home, confirm financing, and review documents. They also protect your deposit when you act within the deadlines.
- Inspection contingency. Inspect the property, request repairs or credits, or cancel within the set period. Typical window is 7–15 days, but your REPC controls.
- Financing contingency. Apply right away and keep your lender updated. If you cannot obtain financing as described, cancel within the deadline.
- Appraisal contingency. If the appraisal is low and your lender will not fund, you may renegotiate or cancel within the appraisal window.
- Title contingency. Review the title commitment and object to defects. If unresolved, you can cancel within the stated time.
- HOA and document review. For HOA communities, you usually have a few days after receiving documents to cancel if terms are unacceptable.
Strategy in competitive markets
You can keep protections while making your offer attractive. Many buyers shorten, rather than waive, timelines. For example, a shorter inspection period or a faster loan approval can strengthen your offer without removing safeguards.
Quick checklist
Use this list to protect your deposit in a Hurricane purchase:
- Get a receipt for your earnest money deposit.
- Enter every REPC deadline on your calendar with reminders.
- Schedule inspections immediately after acceptance.
- Apply for your loan right away and send lender documents quickly.
- If you plan to cancel, send the correct written notice before the deadline and keep copies.
- Confirm who holds your earnest money and how release instructions work.
Final thoughts and next step
Earnest money is a powerful signal that you are serious, and it moves with you to closing. It also creates risk if you miss notice dates or remove protections too soon. A clear plan and tight timelines make all the difference.
If you are buying in Hurricane, I am happy to review the REPC timelines and contingencies with you in a short consult so you know exactly when your deposit is refundable and how to protect it. Reach out to Ciera Huha to get started.
FAQs
What is earnest money in Utah home purchases?
- It is a good‑faith deposit submitted with your offer that is applied to your cash due at closing, or refunded if you cancel within a valid contingency under the REPC.
Who holds earnest money in Hurricane deals?
- The REPC names the holder, typically a title or escrow company or the listing broker’s trust account, and sets delivery and release terms.
When is earnest money refundable under the REPC?
- When you cancel within a contingency window, such as inspection, financing, appraisal, title, or HOA review, and follow the contract’s notice steps.
How much earnest money should I offer in Washington County?
- Many buyers use $1,000–$3,000 for lower‑priced or low‑competition homes, 1%–2% for mid‑range purchases, and 3%–5% in competitive or higher‑priced situations.
What happens if my appraisal is low in Utah?
- If the appraisal is below the price and the lender will not fund, you can usually renegotiate or cancel within the appraisal deadline to protect your deposit.
What if the seller and buyer disagree about releasing the deposit?
- The escrow holder may keep funds in trust until the parties agree in writing or a court order directs release, unless the contract provides for another resolution.
How fast must I deposit earnest money after acceptance?
- Many Utah contracts require delivery within 1–3 business days of mutual acceptance, but your signed REPC controls the exact deadline.
When could I lose my earnest money?
- If you default after removing protections or miss required notice deadlines, the seller may be entitled to keep the deposit under the REPC’s remedies section.
