Earnest Money in Indiana: What Buyers Should Know

Have you ever wondered why a seller asks for money before closing? When you buy a home in Fishers or anywhere in Hamilton County, you will almost always put down earnest money to show you are serious. If you are a first‑time buyer or moving up, it can feel like a big step. This guide gives you the local, plain‑English basics so you know how much to offer, how to protect it, and what timelines to watch. Let’s dive in.

Earnest money basics in Indiana

Earnest money, sometimes called an earnest money deposit or good‑faith deposit, is cash you put down when your offer is accepted. It shows the seller you intend to close and it becomes part of your funds at closing. If the sale completes, the deposit is usually credited to your down payment or closing costs.

Your purchase agreement controls what happens to the deposit. If you cancel under a valid contingency in the contract, you typically get the money back. If you breach the agreement without a contingency, the seller may be entitled to keep some or all of the deposit, subject to the contract and any dispute process.

How much earnest money in Fishers?

Across many markets, typical deposits range from about 1 to 3 percent of the purchase price, or a flat amount like 1,000 to 10,000 dollars. In Hamilton County, demand is often strong, which can lead buyers to offer higher deposits to stand out in multiple‑offer situations. Price point and competition in the neighborhood also influence what is considered competitive.

Aim for a number that shows commitment without overextending your cash. The right amount varies by home, timing, and how many offers are in play. Ask your agent for recent examples in your target price band so you can match local expectations without risking more than needed.

Who holds your deposit and how it is protected

The purchase agreement states who holds your funds. In Indiana, deposits are commonly held by the listing broker or a title or escrow company. Whoever holds the funds must place them in a trust or escrow account and follow state rules for accounting and disbursement.

Always get written confirmation of receipt and escrow instructions. Title companies and brokers use procedures that describe when the deposit is released, either back to you or to the seller. If the transaction closes, your funds go to the closing agent and are credited to you on the settlement statement.

When you get it back or lose it

Several standard contingencies protect your deposit if you act on time and follow the contract.

• Inspection contingency. If your inspection reveals issues and you timely terminate or cannot reach an agreement on repairs within the inspection window, you may receive a refund as stated in the contract.
• Financing contingency. If you cannot secure loan approval by the deadline and you give proper notice, you may be entitled to a refund.
• Appraisal contingency. If the appraisal comes in below the purchase price and you terminate or cannot renegotiate, the contract often provides for a refund.
• Title contingency. If title problems are discovered and not cured as allowed in the agreement, you may be able to cancel and receive a refund.

You risk forfeiture if you withdraw without a contractual right or miss a deadline and later try to cancel. For example, if you let the inspection period expire and then attempt to terminate based on inspection issues, the seller may claim the deposit. Most contracts outline how disputes are handled, including mediation or a court process if the parties disagree.

Key deadlines and a sample timeline

Your exact dates will be in your purchase agreement. Calendar them the day your offer is accepted so you never miss a checkpoint. Common timelines include:

• Deposit due: often within 24 to 72 hours of ratification
• Inspection window: often 7 to 14 days from the effective date
• Loan commitment: often 21 to 30 days, depending on lender and loan type
• Appraisal timing: usually tied to financing milestones or receipt of the report
• Title review and cure periods: defined in the contract
• Closing date: often 30 to 45 days from ratification in a conventional loan

Example timeline for a Fishers purchase, subject to your contract:

1. Offer accepted on Day 0.
2. Earnest money delivered within 48 hours.
3. General inspection completed by Day 10, with any repair requests or termination sent before the deadline.
4. Loan commitment delivered by Day 25 to 30.
5. Appraisal arrives around the financing timeline, with any appraisal‑related actions taken right away.
6. Title cleared before closing.
7. Closing at Day 40 to 45.

Smart safeguards to reduce risk

Protect your deposit by using practical steps that align with the contract:

• Put every deadline on your calendar the moment your offer is signed.
• Send all required notices in writing before the stated cutoff times.
• Ask that a neutral third party, such as a title company, hold the funds if you prefer additional neutrality.
• Keep copies of the deposit receipt, escrow instructions, and all correspondence.
• Verify acceptable payment methods before you send funds. Many escrow holders prefer a wire, certified funds, or a check.
• Guard against wire fraud. Never rely only on emailed wiring instructions. Call a known, trusted number to confirm account details before sending money.

What to confirm in your contract

Before you sign, review the clauses that control your deposit:

• Who holds the earnest money and where it will be deposited
• Exact deposit deadline and acceptable forms of payment
• Conditions for refund under inspection, financing, appraisal, and title contingencies
• Required notice procedures and where to send them
• Dispute resolution steps if the parties disagree about the deposit
• The effective or ratification date that starts all timelines

If you have questions about the wording or timing, ask your agent to walk you through the clause line by line. Small differences in phrasing can change outcomes.

How Megan helps Fishers buyers

You deserve clear guidance and a safe, smooth path to closing. With a background as a real estate attorney and a track record across Hamilton County, Megan brings contract literacy and calm, steady negotiation to every step. You will understand your deadlines, use your contingencies effectively, and keep your deposit protected.

Ready to shop in Fishers with confidence? Connect with Megan Kelly Leone Real Estate for a local, low‑risk approach that puts your interests first.

FAQs

What is earnest money in Indiana real estate?

• It is a good‑faith deposit you pay when your offer is accepted, held in escrow, and applied to your closing costs or down payment if the deal closes.

How much earnest money should I put down in Fishers?

• Many buyers offer 1 to 3 percent of the price or a flat 1,000 to 10,000 dollars, adjusted for competition, price point, and seller expectations.

Who holds earnest money in Indiana transactions?

• The contract names the holder, often the listing broker or a title or escrow company, which must place it in a trust or escrow account.

When is earnest money refundable in Indiana?

• If you cancel under a valid contingency, such as inspection, financing, appraisal, or title, and you give timely written notice per the contract, it is typically refundable.

What happens if I miss the inspection deadline in Indiana?

• If you miss the deadline and try to cancel later based on inspection items, the seller may claim the deposit under the contract’s default rules.

How fast do I need to deliver earnest money after acceptance?

• Many Indiana contracts require delivery within 24 to 72 hours of ratification, but your agreement controls the exact deadline.