Wondering how much earnest money you need to compete for a home in Nashua? You want to show sellers you’re serious without putting your savings at unnecessary risk. This guide explains what earnest money is, how deposits work in New Hampshire, typical amounts in Nashua, when funds are refundable, and smart ways to strengthen your offer while protecting yourself. Let’s dive in.
Earnest money basics
Earnest money is a good-faith deposit you make with an offer or shortly after acceptance to show you intend to purchase. If you close, it is applied to your down payment or closing costs. Sellers view it as a sign of commitment, which can help your offer stand out. The exact rules come from the purchase and sale agreement you sign.
Nashua deposit norms
Nashua’s proximity to the Boston metro area often boosts buyer demand, which can influence deposit expectations. In lower-competition situations, many buyers offer a flat amount in the $1,000 to $5,000 range. For middle to higher price points, deposits around 1% to 3% of the purchase price are common. In a multiple-offer setting, some buyers increase the deposit or add additional funds to appear stronger, but you should balance that with contingency protections.
New Hampshire deposit process
Your contract will state when the deposit is due and who holds it. In New Hampshire, you may submit the deposit with your offer or within a short window after acceptance, commonly 24 to 72 hours. Many offers also use step deposits, with a modest amount due at acceptance and a larger amount when the purchase and sale agreement is signed.
Earnest money is typically held in a broker’s trust account, a title company escrow, or an attorney’s escrow. The agreement should clearly name the escrow holder and spell out how funds are released. At closing, your deposit is applied to your cash to close. Keep copies of checks or wire confirmations and any escrow receipts.
Refunds and contingencies
Whether your deposit is refundable depends on your contract and whether you follow the contingency terms and deadlines. Common contingencies include inspection, financing, appraisal, and title. If you terminate within the allowed window and give proper written notice, your earnest money is typically refunded per the agreement.
If a dispute arises, the escrow holder usually needs a mutual release from both parties before disbursing funds. If the parties cannot agree, the funds may remain in escrow until there is an agreement, a court order, or an interpleader action. Many New Hampshire buyers use standard forms that define notice procedures and timelines, so read them closely and consider consulting a local professional.
Pitfalls that risk your deposit
- Missing contingency deadlines or failing to send written notice
- Walking away after contingencies expire or after you waive them
- Skipping a scheduled second deposit that the contract requires
- Not documenting termination or changes in writing
Offer strategies to stay competitive
- Use staggered deposits: Start with a modest initial deposit, then add a larger second deposit at the purchase and sale signing. This limits early exposure if inspections uncover issues.
- Keep key protections, tighten timelines: Preserve inspection and financing contingencies, but shorten windows to what you can realistically meet, such as a 5 to 7 day inspection period.
- Pair strong pre-approval with reasonable earnest money: Submit a lender pre-approval and contact info to show strength without overcommitting funds.
- Consider escalation clauses carefully: They can work alongside a sensible deposit, but they must be drafted correctly and can reveal your top price.
- Define inspection remedies: Clarify whether you will request repairs, credits, or only terminate for major health, safety, or structural items.
- Think twice about nonrefundable deposits: These increase seller confidence but raise your risk. Many first-time buyers should avoid them unless advised by counsel.
- Lean on local insight: Ask your Nashua agent what deposit sizes have recently won offers. Norms shift with inventory and interest rates.
Example scenarios
- Balanced approach: You offer on a mid-range Nashua home with a $2,500 initial deposit and a $7,500 second deposit at the purchase and sale signing. You keep inspection and financing contingencies with a 7-day inspection window. Your total deposit equals about 2% of price, which is common in many situations.
- Hot competition: There are several offers. You stay within your budget, provide a 3% total deposit, shorten inspection to 5 days with a focus on major items, and include a strong pre-approval. You keep your financing and appraisal protections.
- Financing falls through: You applied on time, cooperated with your lender, and could not obtain a loan commitment. You gave written notice within your financing contingency period, so your deposit is typically refundable per the contract.
- Missed deadline: You intended to use the inspection contingency but forgot to send written notice before the deadline. The seller may be entitled to keep your deposit. This is why tracking dates and notices matters.
Timeline and buyer checklist
Typical timeline
- Offer submitted: Include an initial deposit or state when it is due.
- Acceptance: Deliver the deposit within the contract window, often 24 to 72 hours.
- Inspection period: Complete inspections, negotiate, or terminate within the stated days.
- Financing period: Work toward written loan commitment by the deadline.
- Appraisal and title: Clear these items per the contract timeline.
- Closing: Your deposit is applied to your funds to close.
Buyer checklist
- Confirm the exact escrow holder and account instructions
- Put deposit amounts and due dates in writing in your contract
- Track inspection, financing, and appraisal deadlines and notice rules
- Obtain a lender pre-approval or gather proof of funds for cash
- Consider step deposits to manage risk
- Keep copies of checks, wires, and escrow receipts
Get local guidance
Your earnest money should match the home, the competition, and your risk comfort. If you want help calibrating deposit size and contingency timelines for today’s Nashua market, reach out to Alex Betses. You will get clear, local guidance and a strategy that protects you while keeping your offer competitive.
FAQs
How much earnest money do Nashua buyers typically put down?
- In many cases, buyers offer $1,000 to $5,000 in lower-competition settings, or about 1% to 3% of the purchase price for mid to higher price points, with higher deposits in multiple-offer situations.
Who holds earnest money in New Hampshire?
- Funds are usually held in a broker trust account, a title company escrow, or an attorney escrow, as named in your purchase and sale agreement.
When is earnest money due in New Hampshire?
- It often accompanies the offer or is due within 24 to 72 hours after acceptance, and many contracts add a second deposit at the purchase and sale signing.
When is my deposit refundable in New Hampshire?
- If you terminate within your inspection, financing, appraisal, or title contingency windows and give proper written notice as the contract requires, your deposit is typically refundable.
What happens if there is an escrow dispute?
- The escrow holder generally needs a mutual release, and without agreement the funds may remain in escrow until there is a negotiated resolution, a court order, or an interpleader.
Should I ever make my deposit nonrefundable?
- Some buyers consider limited nonrefundable funds after inspection removal to stand out, but this increases risk and is rarely recommended without professional guidance.
