Buying in Chevy Chase and wondering how much earnest money to put down, when it’s due, and how you can get it back if things change? You are not alone. In a higher-priced, competitive market, your deposit can help your offer stand out, yet it also creates risk if you miss deadlines.
This guide explains how earnest money works in Maryland, what’s typical in Chevy Chase and nearby Montgomery County communities, and the steps you can take to protect your funds without weakening your offer. You will learn norms, timelines, contingency basics, and smart strategies that fit this market. Let’s dive in.
What earnest money is
Earnest money is a good‑faith deposit you make when your offer is accepted. It shows commitment and is held in escrow until closing. If you close, it is usually applied to your down payment and closing costs. If you cancel for a reason allowed in the contract, it is typically refundable.
Maryland contracts spell out exactly when a deposit is refundable, how it is held, and how it is released. Read and follow those instructions closely.
Chevy Chase market norms
Chevy Chase sits in an upper‑end segment of Montgomery County. Even when the percentage is similar to other markets, the dollar amount of a deposit is often higher because list prices are higher.
- A common range is 1 to 3 percent of the purchase price. This is a market practice, not a legal requirement.
- In competitive listings with multiple offers, buyers often show added commitment with higher deposits or shorter contingency periods.
- For seven‑figure homes, buyers may choose a fixed dollar amount, such as $10,000, $25,000, or $50,000, to signal seriousness.
Simple examples by price point
- At $900,000, 2 percent equals $18,000.
- At $1,300,000, 2 percent equals $26,000.
- At $1,800,000, 2 percent equals $36,000.
These examples are illustrative. Your strategy should reflect the specific property, level of competition, and your risk tolerance.
Who holds your deposit in Maryland
In Maryland, earnest money is commonly held by one of the following until closing or release:
- A title or settlement company
- An attorney involved in the transaction
- A real estate broker’s trust or escrow account
For most Montgomery County transactions, a title or settlement company holds the funds in escrow. Always name the specific escrow holder in your offer and make sure their information is correct.
Interest and escrow details
Whether your deposit earns interest depends on the escrow agreement and the escrow holder’s policies. Some escrow accounts are interest‑bearing pooled accounts. The contract and escrow instructions will state whether interest, if any, is credited and to whom.
Always request a written receipt for your deposit and keep copies of the escrow instructions and any updates.
Refundability and contingencies
Your deposit is refundable only as the contract allows. Standard contingencies protect your right to cancel and receive a refund if you act within the agreed timelines.
- Inspection contingency. You can inspect and either negotiate repairs, accept the property, or cancel within the inspection period per the contract. If you cancel properly and on time, a refund is typical.
- Financing contingency. If you cannot obtain a loan approval by the deadline and you follow the contract’s procedure to cancel, the deposit is typically refundable.
- Appraisal contingency. If the property does not appraise at the required value, you may have the right to renegotiate or cancel per the contract timeline.
- Title or HOA review. Title defects or unacceptable homeowners association documents can allow cancellation if the contract provides for it and you follow the process.
When a deposit can be forfeited
If you breach the contract without an allowed reason, fail to meet a contingency deadline, or fail to close when required, the seller may be entitled to keep the deposit under a liquidated damages clause if the contract provides for that remedy. Enforcement can vary, and many contracts require mutual written consent or a legal resolution before funds are released.
Dispute and disbursement process
Escrow holders typically need written instructions signed by both parties to release funds. If the parties cannot agree, the escrow agent will hold the deposit until the dispute is resolved by settlement, arbitration, or court order, as outlined in the contract.
Timelines that matter in this market
Timing is critical in Chevy Chase, where homes can move quickly. Common norms include:
- Deposit delivery. Often due within 24 to 72 hours after contract ratification, or as specified in your offer.
- Inspection period. Frequently 7 to 10 days, though competitive offers sometimes shorten this.
- Financing milestone. Many buyers have 21 to 30 days to obtain a loan commitment, depending on lender and loan type.
- Appraisal. Typically completed within 2 to 3 weeks of loan processing. The appraisal contingency date may be tied to the financing deadline.
- Title and HOA document review. Often 7 to 14 days when applicable.
- Closing. Commonly 30 to 45 days from contract, though both shorter and longer settlements are negotiated.
Set clear calendar dates in your offer and coordinate with your lender, inspector, and title company to stay ahead of every milestone.
Protect your deposit and stay competitive
You can write a strong offer while managing risk. Use this checklist to plan your deposit strategy:
- Get fully pre‑approved. Choose a lender who can meet local timelines. A strong pre‑approval reduces the chance of financing issues.
- Match deposit to the property and competition. Aim for 1 to 3 percent or a compelling fixed amount for higher‑priced homes.
- Name the escrow holder in your offer. Include their full legal name and contact details.
- Keep key contingencies unless there is a clear strategy. Waiving protections increases risk to your deposit.
- Set realistic timelines you can meet. Do not accept shorter deadlines unless your team can truly deliver.
- Follow escrow instructions precisely. Confirm wiring details directly with the title company to avoid fraud.
- Document everything. Keep your escrow receipt, all notices, and proof of timely delivery.
Advanced tactics to consider carefully
- Appraisal gap coverage. Offer to cover a specific shortfall between the appraised value and your contract price, up to a cap. This supports your offer without fully waiving the appraisal safety net.
- Escalation clauses. You can automatically increase your offer against competing bids up to a maximum. Pair this with a deposit that aligns with your top price.
- As‑is or waived inspections. These can strengthen an offer but meaningfully increase deposit risk. Use only with clear understanding of the tradeoffs.
Step by step: from offer to closing
Prepare and pre‑approve. Finalize your financing plan and choose an escrow/title company before you write.
Write the offer. Specify deposit amount, escrow holder, and delivery deadline. Include your contingency plan and clear dates.
Ratification. Once the seller signs, your clock starts. Deliver your deposit within the required 24 to 72 hours or the agreed time.
Deadlines. Complete inspections, lender application steps, appraisal scheduling, and title review on or before the dates in your contract. If an issue arises, follow the contract’s notice and cancellation procedures in writing.
Final approval. When contingencies are satisfied or removed, the deposit remains in escrow until settlement, where it is applied to your closing funds.
Settlement and disbursement. At closing, your escrowed deposit is credited to you per the settlement statement. If the contract is terminated properly, follow the release instructions to retrieve the funds.
Common mistakes to avoid
- Delivering the deposit late. This can undermine your contract and create risk.
- Vague or missing escrow details. Always name the specific holder and method of delivery.
- Over‑shortening deadlines. Agreeing to unrealistic inspection or financing timelines increases forfeiture risk.
- Waiving key protections without a plan. Know exactly how you will manage the risks if you waive or limit contingencies.
- Poor documentation. If you cancel, send notices per the contract and keep proof of delivery.
How a local advisor adds value
In Chevy Chase and the wider Montgomery County market, small contract details can decide the outcome in a multiple‑offer situation. A seasoned, calm advisor helps you shape the right deposit amount, set timelines you can meet, and protect your funds with clear contingency language and disciplined execution.
If you are weighing how aggressive to be on a specific listing, or you need a second set of eyes on deposit risk, let’s talk. Hugh McDermott brings a client‑first approach, deep local knowledge, and hands‑on coordination from offer to closing. Let’s connect.
FAQs
What is earnest money in a Maryland home purchase?
- It is a good‑faith deposit held in escrow after your offer is accepted, applied to closing if you proceed, and refundable only as allowed by the contract.
How much earnest money should Chevy Chase buyers plan to put down?
- A common practice is 1 to 3 percent of the price, with higher fixed dollar amounts in competitive or higher‑priced listings to signal commitment.
When is earnest money due after offer acceptance in Maryland?
- It is typically due within 24 to 72 hours of contract ratification, or as specified in your offer.
Is earnest money refundable if my financing falls through?
- If your contract includes a financing contingency and you cancel properly within the deadline, a refund is typical per the agreement.
Who holds earnest money in Maryland and does it earn interest?
- Title or settlement companies commonly hold the funds; interest depends on the escrow agreement and the holder’s policies, as stated in your contract.
What if buyer and seller disagree about releasing the deposit?
- Escrow agents usually need mutual written instructions or a legal resolution before releasing funds, so disputes are held until resolved per the contract.
