Are you preparing to make an offer on a Merrick home and wondering how earnest money works? You are not alone. Many buyers are confident about their budget and pre-approval, but feel unsure about deposits, timing, and what happens if plans change. In this guide, you will learn what earnest money is, how it works in Nassau County, what amount to expect, when it is refundable, and practical steps to protect your funds. Let’s dive in.
Earnest money basics
Earnest money is a good-faith deposit you submit with your offer to show the seller you are serious. If the sale goes forward, the deposit is credited toward your purchase price at closing. It is not the same as your down payment or other closing funds, which you send at closing.
For sellers, the deposit adds accountability. If a buyer walks away without a valid reason under the contract, the seller may be entitled to keep the deposit. For buyers, it demonstrates commitment while giving you time to complete inspections, financing, and other steps.
How it works in Nassau County
In Merrick and across Nassau County, attorneys commonly handle closings and escrow. It is standard for your earnest money to be held in an attorney escrow account or a broker trust account. The exact holder depends on the parties and what is written in your contract.
You usually deliver the deposit at contract signing or within a short time after your offer is accepted. Many contracts say “upon contract signing” or within 2 to 5 business days. Always check that your contract clearly states the amount, the deadline, and who will hold the funds.
Typical deposit amounts in Merrick
There is no single number that fits every property or market condition. Nationally, you will often hear 1 to 3 percent of the purchase price as a benchmark, but local practice can vary. In suburban Long Island markets like Merrick, the deposit can depend on list price, demand, and seller expectations.
Ask your local agent or attorney about current norms for your price point. On less competitive homes, you might see modest fixed sums. On higher-priced or highly competitive listings, you might see percentage-based deposits. The key is to balance offer strength with your risk tolerance.
Who holds your deposit
In New York, it is common for attorneys to hold earnest money in escrow. Brokerage trust accounts are also used. Either way, your funds must be kept in a separate escrow or trust account with proper records. Confirm the escrow holder in your contract, and request a written receipt and account details once you pay.
When your deposit is refundable
Whether your deposit is refundable depends on your contingencies and your timing. Common buyer protections include:
- Inspection contingency. If you end the deal within the inspection window according to the contract, the deposit is typically returned.
- Mortgage or financing contingency. If you cannot secure financing within the contingency period and you follow the notice rules, the deposit is usually refundable.
- Appraisal contingency. If the appraisal comes in below the purchase price and the contract gives you the right to renegotiate or cancel, your deposit is generally protected.
- Attorney review contingency. Some contracts include a short period where either party can withdraw after attorney review.
If you withdraw after you remove contingencies or after deadlines pass, the seller may be entitled to keep the deposit as liquidated damages. Always follow the contract’s notice and timing requirements exactly.
When the seller breaches
If the seller refuses to move forward after accepting your contract, you can usually recover your deposit and may have other legal remedies. Your exact options depend on your contract and New York law. Talk with your attorney right away if this comes up.
Common Merrick scenarios
- You end the contract during the inspection contingency per the contract rules. Your deposit is typically returned.
- You waive the inspection to compete and later find a major defect. If your contract does not provide other remedies and there is no seller misconduct, you may risk forfeiting the deposit.
- Closing is delayed but the sale happens. Your deposit is credited at closing. If the delay causes termination, what happens to the deposit depends on the reason for termination and the contract.
How to protect your deposit
Your deposit is significant money. Treat it with care from day one.
- Put deposit terms in writing. Specify the amount, exact deadline, and escrow holder in the contract.
- Get proof of escrow. Request a written receipt and the escrow account details from the attorney or broker.
- Follow every deadline. Inspection, financing, appraisal, and attorney-review timelines are critical to refundability.
- Verify wiring instructions. Always confirm wiring instructions by calling the known office number of the attorney or broker. Do not rely on email links or last-minute changes. Wire fraud is a real risk.
- Keep records. Save your contract, deposit receipt, and all notices or emails related to contingencies.
Paying the deposit safely
Use a check payable to the escrow holder or a verified wire to the escrow account. Avoid sending cash. If you wire funds, call the escrow holder using a phone number you already have or can verify independently. Ask for a written acknowledgment once the funds are received.
Making your offer stronger without overexposing risk
Sellers pay attention to deposit size because it signals commitment. A larger deposit can make your offer stand out, especially in a fast-moving Merrick market. That said, a larger deposit increases potential loss if you later breach the contract without a valid contingency.
Here is how to strike a balance:
- Calibrate deposit size to the home and competition level.
- Keep key contingencies that protect your deposit, unless you are fully comfortable with the risk.
- If you shorten timelines to compete, make sure you can meet them.
- If you consider a larger deposit, pair it with strong financing documentation and clear contingency language.
What happens in a deposit dispute
Most escrow holders require a mutual release signed by both parties to release funds. If you and the seller disagree, the escrow holder may hold the funds until you reach an agreement or a court order decides. Attorneys commonly resolve these issues. Sometimes a negotiated mutual release is the quickest path.
If you believe you are entitled to your deposit, notify the other side exactly as the contract requires. Your attorney can help you meet all notice rules and document your position.
At closing: crediting your deposit
When your purchase closes, the earnest money is credited toward your purchase price on the settlement statement. Review the figures before closing to confirm your deposit appears as a credit.
Quick buyer checklist
- Confirm local deposit norms for Merrick with your agent or attorney.
- Decide on contingencies and timelines before you submit your offer.
- Put deposit amount, deadline, and escrow holder in the contract.
- Pay by check or verified wire; verify instructions by phone.
- Get a written escrow receipt and keep all records.
- Meet every contingency deadline and follow notice rules.
- Review your settlement statement to confirm the deposit credit.
Final thoughts for Merrick buyers
Earnest money is a normal part of buying a home in Merrick and across Nassau County. It shows good faith and, when handled correctly, becomes part of your equity at closing. The key is clarity. Spell out the amount, timing, and escrow holder, keep your contingencies aligned with your comfort level, and follow notice and timing rules closely.
Because deposit outcomes turn on contract language and facts, talk with your attorney and your agent before you finalize terms. If you are ready to plan your offer strategy or want a quick read on local deposit norms, we are here to help.
If you want a clear, step-by-step plan for your next Merrick offer, connect with Sold by Nick & Nat for local guidance tailored to your price point and timeline.
FAQs
How much earnest money should Merrick buyers expect?
- It varies by price point and competition. Nationally, 1 to 3 percent is common, but in Merrick the amount depends on local demand and seller expectations. Ask your agent or attorney for current norms.
Who holds earnest money in Nassau County deals?
- Typically an attorney’s escrow account or a broker trust account. Your contract should name the holder and the timing. Request a written escrow receipt.
When is my Merrick deposit refundable?
- If you end the contract within a valid contingency window and follow all notice rules, your deposit is typically refundable. Missing deadlines or waiving protections increases forfeiture risk.
What if the seller backs out after accepting my offer?
- If the seller breaches, you can usually recover your deposit and may have other remedies. Consult your attorney immediately to understand your options.
How do I avoid wire fraud when sending my deposit?
- Verify instructions by calling the attorney or broker using a known phone number. Do not trust last-minute email changes. Request a written acknowledgment once funds arrive.
Can the seller keep my deposit if I cannot get a mortgage?
- If your contract includes a valid financing contingency and you comply with its timing and notice requirements, your deposit is generally protected. Without that contingency, the seller may claim breach.
