Making an offer on a Wilmette home and wondering how earnest money fits in? You are not alone. This small line item has a big role in your offer’s strength and in protecting both sides while contingencies play out. In this guide, you’ll learn what earnest money is, how much is typical in Wilmette, when it’s due, and what happens if you cancel or the deal falls apart. Let’s dive in.
Earnest money basics
What it is and why it matters
Earnest money is a good‑faith deposit you put down after a seller accepts your offer. It shows you’re serious and gives the seller confidence while you complete inspections, appraisal, and financing. If you close, the deposit is credited to your down payment or closing costs. The purchase contract controls how it’s handled from start to finish.
Who holds it in Illinois
In Illinois, earnest money is typically held in an escrow account by a title or closing company, an attorney, or a brokerage trust account. The contract names the escrow holder and sets the rules for when funds are deposited, when they can be released, and what happens if someone defaults.
Typical amounts in Wilmette
There isn’t one “right” number, but local norms offer a helpful range. Buyers in Wilmette often structure earnest money as either a percentage of the price or a round‑number deposit.
- Lower to mid‑price homes: commonly $5,000 to $15,000, or about 1 to 2 percent of the price.
- Higher‑value homes or multiple‑offer situations: often $15,000 to $50,000+, or 2 to 5 percent to make the offer stand out.
Sellers in Wilmette usually expect a deposit that discourages casual offers and reflects current demand. In especially competitive moments, buyers may increase the amount to strengthen their position.
What affects the amount
- Multiple offers and short closings push deposits higher.
- Strong contingencies and slower markets can reduce the amount.
- Cash offers, waived contingencies, or limited inspection requests often come with larger deposits.
- First‑time or cautious buyers may choose more modest amounts within contract norms.
When you deposit the funds
After the seller accepts your offer, you’ll typically have 24 to 72 hours to deposit earnest money with the escrow holder named in the contract. Some contracts call for a single deposit, while others use staged deposits. Always follow the exact timelines and steps in your agreement.
Tip: Confirm the deposit method early. Local title companies often accept certified checks or wire transfers. If wiring, verify instructions directly with the title company by phone to avoid fraud.
Attorney review and inspections
Illinois contracts commonly include an attorney review period. During this window, either side’s attorney can propose edits or, if necessary, cancel according to the contract’s terms.
- Attorney review often runs 3 to 10 business days, depending on what’s negotiated.
- The inspection period typically lasts 5 to 14 days from acceptance.
If you terminate within a valid attorney review or inspection contingency and follow the contract’s notice rules, your earnest money is usually returned. If you request repairs and the parties cannot agree, your options depend on the contract. In many cases, you can proceed, accept the seller’s position, or terminate per the contingency’s terms.
Financing and appraisal
Most buyers include financing and appraisal protections. If your lender ultimately denies the loan or the appraisal comes in low, your contract may let you renegotiate or cancel.
- Financing approvals often take several weeks, tied to contract deadlines.
- Appraisal results can trigger renegotiation or termination rights.
If you terminate under a valid financing or appraisal contingency and meet all notice and timing requirements, the earnest money is generally returned.
From acceptance to closing
Your earnest money stays in escrow until closing or until a contract clause allows disbursement. At the closing table, it will be applied to your settlement costs.
When buyers get it back
You can typically expect your earnest money back when you:
- Terminate within a valid contingency period (inspection, financing, appraisal, title, or attorney review) and provide proper notice.
- Properly terminate because the seller cannot perform, such as not being able to deliver marketable title.
When sellers may keep it
Sellers may be entitled to keep the deposit if the buyer breaches the contract without a valid right to cancel. Many Illinois contracts include a liquidated damages clause, which may allow the seller to retain the earnest money as the sole remedy, but actual language varies by form and by deal. If you waive contingencies or agree to nonrefundable terms, those provisions must be clear and can increase your risk if you later back out.
If there is a dispute
Disagreements sometimes happen. The path to resolution usually follows the contract first.
- The contract may require mediation or arbitration.
- Escrow holders may need a written mutual release to disburse funds.
- If the parties cannot agree, the escrow agent can ask a court to decide through an interpleader, or the parties can litigate directly.
- Keep records and follow notice and cure dates exactly. Documentation and timing matter.
Buyer checklist for Wilmette
- Decide on a strategy: percentage vs. flat‑dollar deposit based on price point and competitiveness.
- Confirm the escrow holder and deposit method. Have certified funds or wire details ready.
- Calendar every deadline: attorney review, inspection, appraisal, financing.
- Line up your inspector and lender before you offer so you can move quickly.
- Understand the risk if you offer large or nonrefundable deposits.
- Keep all receipts and communications, including inspection reports and notices.
Seller checklist for Wilmette
- Compare offers by total strength: earnest money size, financing, and contingency terms.
- Confirm who will hold the funds and request proof of deposit on time.
- Understand your remedies if the buyer defaults. Consult your attorney before declaring a breach.
- Track all deadlines, responses, and repair negotiations in writing.
Wilmette scenarios to make it real
- Scenario A: A typical, non‑competitive purchase. You offer about 1 percent earnest money with a 10‑day inspection and a 30 to 45‑day financing window. You complete inspections and clear the loan. Your deposit is credited at closing.
- Scenario B: A competitive listing with multiple offers. You offer $10,000 earnest money and limit the inspection timeline to strengthen your position. If you later back out without a contractual reason, your deposit is at risk.
- Scenario C: You terminate during inspection. Your inspector finds a major issue. You notify the seller within the inspection period per the contract and choose to terminate. If allowed by the contract, your earnest money is returned.
Protect your deposit
- Read your contract closely. The contract controls every deadline and outcome.
- Send notices in writing and on time. Keep copies.
- Verify wire instructions directly with the title company by phone.
- Avoid waiving contingencies unless you fully understand the risk.
- Ask your real estate attorney and agent to review timelines and any proposed changes during attorney review.
Next steps in Wilmette
Earnest money is a small part of your offer that carries real weight. When you match the amount to the moment and follow your contract to the letter, you protect your interests and keep the path to closing clear. If you want a tailored plan for your price point and Wilmette’s current market conditions, reach out to Ginny Stewart to Schedule a Private Consultation.
FAQs
How much earnest money is typical in Wilmette?
- Often $5,000 to $15,000 for lower to mid‑price homes, and $15,000 to $50,000+ or 2 to 5 percent for higher‑value or highly competitive situations.
Who usually holds earnest money in Illinois deals?
- A title or closing company, an attorney’s escrow, or a brokerage trust account named in the purchase contract.
How soon do I have to deposit earnest money after acceptance?
- Commonly within 24 to 72 hours, but your specific contract deadline controls.
Can I get my earnest money back if I cancel after inspection?
- If you terminate within the inspection contingency and follow notice rules in the contract, the deposit is usually returned.
What if the appraisal comes in low or financing is denied?
- If you have valid appraisal or financing contingencies and comply with deadlines, you can often renegotiate or terminate and recover the deposit.
How do I pay earnest money in Wilmette?
- Most escrow holders accept certified checks or wires; confirm instructions directly with the title company and verify by phone to avoid fraud.
What happens if the buyer and seller disagree about the deposit?
- The contract’s dispute steps apply first; escrow may require a mutual release or a court decision if the parties cannot agree.
