Earnest Money in Westport: How It Works

You are ready to make an offer on a Westport home, but you may be unsure how earnest money works. You are not alone. This deposit sets the tone of your offer and protects both you and the seller. In this guide, you will learn what earnest money is, how much to offer, when it is due, how contingencies affect it, and how to keep your funds safe from contract to close. Let’s dive in.

Earnest money in Westport

Earnest money is a good‑faith deposit that accompanies an accepted offer. It shows the seller you intend to perform and it is credited to you at closing. If the sale does not close, the outcome for your deposit depends on the contract.

Westport sits in Fairfield County within the Western Connecticut Planning Region. The market is often competitive, so sellers expect clear deposit terms. In multiple‑offer situations, buyers may offer a larger deposit or tighter dates. In quieter conditions, deposits align with regional norms.

How much and when it is due

There is no single rule for the amount. National guidance often cites 1 to 3 percent of the purchase price in many markets. In Westport, where prices are higher and competition can be strong, you may see larger deposits, but the number is negotiable and should match your risk tolerance.

Many buyers deliver the deposit with the offer or within 24 to 48 hours after acceptance. Your purchase agreement will name the deposit amount, the deadline for delivery, and who will hold the funds in escrow. Always follow the written instructions and timing in your contract.

Factors that influence your deposit amount:

• Price point and property demand.
• How competitive the situation is.
• Your comfort with risk and contingencies.
• Guidance from your agent, lender, and attorney.

Who holds your deposit

In Connecticut, earnest money is typically placed in an escrow account held by one of these parties:

• Your attorney or the seller’s attorney.
• A licensed real estate broker.
• A title or settlement company.

Attorneys and brokers must follow trust and escrow accounting rules in Connecticut. You should receive written confirmation of your deposit. That receipt should state the amount, the date received, the escrow holder, and how the funds may be disbursed under the contract.

Keep proof of payment. Save a copy of a canceled check, a bank confirmation, or a wire confirmation along with the escrow receipt.

Contingencies and timelines that protect you

Your purchase agreement will list contingencies. These are your safety valves. If you follow the contract and a contingency is not met, you can usually cancel and recover your deposit.

Attorney review

In Connecticut, your attorney typically reviews and finalizes terms right after acceptance. Make sure you understand the deposit deadlines and the conditions for a refund before you sign.

Home inspection

Inspection periods often run about 7 to 10 days after acceptance, though this is negotiable. You may cancel within the period or request repairs or credits. Act quickly so you have time to negotiate before the deadline expires.

Mortgage and appraisal

Financing timelines commonly run 30 to 45 days to obtain a written loan commitment. Appraisal usually tracks with financing. If an appraisal comes in low, you may renegotiate, bring additional funds, or cancel under the appraisal or financing protection if your contract allows.

Title and survey

You typically have 7 to 14 days to review the title commitment and raise objections. If the seller cannot cure a title issue within the contract period, you can often terminate and recover your deposit.

Closing date

Closings in Connecticut typically occur 30 to 90 days after acceptance. Lender timing, seller needs, and negotiation will set the date. Deadlines matter, so ask for extensions in writing if you need more time.

What happens if things go wrong

Buyer default

If you fail to close for a reason not protected by a contingency, the seller may seek to keep the deposit as liquidated damages or pursue other remedies. The outcome depends on the contract and applicable law.

Contingency‑based termination

If you cancel within a valid contingency period and follow the notice rules in the contract, you are usually entitled to a return of your deposit.

Appraisal shortfall

Common paths include renegotiating the price, you bringing extra cash, or the seller lowering the price. If no agreement is reached, you may terminate under financing or appraisal protections if the language allows, and receive your deposit back.

Seller breach

If a seller refuses to perform, you may be entitled to your deposit and other remedies. Your attorney will guide you on next steps.

Escrow disputes

If the escrow holder receives conflicting claims, they may hold funds until you and the seller agree. Contracts often outline dispute procedures, such as mediation, arbitration, or litigation. Good documentation and timely notices help resolve issues faster.

How a seasoned Westport agent protects your deposit

A thoughtful strategy reduces risk without weakening your offer. Here is how an experienced local agent helps protect your funds:

• Clear contract drafting: Name the escrow holder, state the delivery method, and set precise calendar dates for deposits and contingencies.
• Documented escrow: Obtain a written receipt immediately with amount, date, and account reference. Keep all confirmations and correspondence.
• Smart escrow choice: Use a reputable attorney’s client trust account or a well‑established settlement agent. If a broker holds funds, confirm written escrow policies.
• Negotiation balance: Offer a deposit that signals strength, but do not exceed your risk comfort. Keep contingency periods reasonable, and avoid waiving protections unless you understand the risks.
• Deadline management: Calendar every date, share reminders, and coordinate inspectors, lenders, and attorneys so you meet milestones.
• Wire safety: Verify wiring instructions by calling the known office number of the escrow holder. Never rely on unexpected email changes.
• Early legal support: If a dispute appears likely, preserve all records, notify the escrow holder in writing, and consult your attorney promptly.

Step‑by‑step: Offer to closing

1. Submit your offer with the deposit terms and who will hold escrow.
2. Upon acceptance, deliver the deposit by the deadline and get a written receipt.
3. Schedule inspections right away and begin financing and appraisal steps.
4. Review title documents and raise any timely objections.
5. Resolve or waive contingencies by the deadlines, or cancel if a valid contingency is not met.
6. Prepare for closing. Your deposit will appear as a credit on your closing statement.

Quick buyer checklist for Westport

• Before you offer: Decide a realistic deposit amount with your agent and lender. Line up your attorney and loan preapproval.
• After acceptance: Deliver funds on time and secure a written escrow receipt. Calendar all contingency deadlines.
• During contingencies: Book inspections in the first available days. Stay in close contact with your lender. Review title promptly.
• If issues arise: Consult your agent and attorney before taking action. Use written notices required by the contract.
• Before closing: Confirm your earnest money credit on the final closing statement.

Buying in Westport should feel exciting and well‑managed. With clear contract terms, firm deadlines, and the right guidance, your deposit can both strengthen your offer and stay protected. For private, high‑touch representation from offer through closing, connect with Libby McKinney Tritschler.

FAQs

How does earnest money work for Westport buyers?

• It is a good‑faith deposit credited to you at closing and held in escrow, with refunds or forfeiture governed by your written contract.

How much earnest money should I offer in Westport?

• Many markets cite 1 to 3 percent as guidance, but Westport deposits may be higher in competitive situations. Choose an amount that fits your strategy and risk comfort.

When is my earnest money due after offer acceptance?

• Many contracts require delivery with the offer or within 24 to 48 hours of acceptance. Your agreement will state the exact deadline and escrow holder.

Who holds the earnest money in Connecticut transactions?

• Common escrow holders include attorneys, licensed brokers, or title and settlement companies. Ask for a written deposit receipt and handling details.

What protects my deposit if the deal falls through?

• Contingencies such as inspection, financing, appraisal, and clear title create paths to cancel and receive a refund when you follow contract deadlines and notice rules.

Can I lose my deposit if I miss a deadline?

• Missing a contingency deadline can jeopardize your refund rights. Ask for extensions in writing before dates expire, and work closely with your agent and attorney.