JournalBuyer & Seller GuidanceDraft · pending review
Earnest money in a Georgia purchase: who holds it, and why it matters
A small detail in the contract with real consequences. What earnest money is, where it goes, and how it differs from a due diligence fee.
By The OnlyWay Team1 min read
Earnest money is a deposit a buyer makes to show good faith once a purchase contract is signed. It is usually credited toward the buyer's costs at closing. Because it is real money held while the transaction is still in motion, it deserves more attention than it often gets.
Who holds it
The purchase contract names the holder of the earnest money and the deadline for delivering it. In Georgia that holder is often the closing attorney, though a contract may identify another authorized holder. The deposit is handled according to the contract and applicable law.
Earnest money is not the due diligence fee
Many Georgia purchase contracts include a due diligence period, during which a buyer can investigate the property. Some contracts also include a separate due diligence or option fee paid for that right. The two payments serve different purposes and can be treated very differently if the buyer does not proceed. Read those provisions carefully, and ask your closing attorney about anything that is unclear.
Questions worth asking before you sign
- Who is the holder named in the contract, and how will the funds be delivered?
- What is the deadline for delivery, and what happens if it is missed?
- Under what circumstances is the deposit refundable?
- Is there a separate due diligence or option fee, and is it refundable?
- Have wiring instructions been confirmed by phone with the holder directly?
That last question matters. Wire fraud targeting real estate transactions is a known risk. Always confirm payment instructions by calling the holder at a number you have verified independently, never one taken from an email.
