Putting money down before you even own the home can feel risky. If you are buying in Hollis, that upfront deposit is called earnest money, and it serves a clear purpose for both you and the seller. You want to make a strong offer without putting more at stake than necessary. In this guide, you will learn how earnest money works in New Hampshire, what’s typical in Hollis, who holds the funds, the deadlines that matter, and how to protect your deposit. Let’s dive in.
Earnest money explained
Earnest money is a good‑faith deposit that accompanies your offer to buy a home. It shows the seller you are serious and gives them temporary assurance while the deal moves forward. If the sale closes, your earnest money is credited toward your purchase price and closing costs.
It is not your down payment or your closing costs by themselves. Those are settled at closing, and the earnest money simply reduces the amount you bring to the table.
Typical amounts in Hollis
There is no fixed statewide rule in New Hampshire for how much you must deposit. Many buyers use a modest fixed sum for lower‑priced homes or about 1% to 3% of the purchase price for typical transactions. In multiple‑offer situations, buyers sometimes increase the deposit to make their offer stand out.
Local customs in Hollis can shift with market conditions. A trusted local agent and the closing company handling your transaction can help you choose an amount that supports your goals without putting more at risk than you intend.
Who holds your deposit
Your deposit is usually placed with a neutral third party. Common options include:
- A brokerage client trust account held by the listing broker or buyer’s broker
- A title or closing company’s escrow account
- An attorney’s trust account
These holders follow standard procedures for trust funds. In New Hampshire, broker conduct and trust accounts are regulated, and escrow holders document deposits and disbursements according to the contract.
Timing and proof
Purchase agreements spell out the deposit amount, who will hold it, and when it is due. Many contracts call for delivery within 24 to 72 hours of acceptance, but timelines vary.
Always get a written receipt from the escrow holder. Keep your bank record or wire confirmation and the escrow contact information so you can verify funds quickly if needed.
Contingencies that protect you
Contingencies are contract clauses that allow you to cancel under specific conditions and recover your earnest money if you act within the deadlines.
Common contingencies include:
- Home inspection
- Financing or mortgage approval
- Appraisal
- Title and clearance
If you cancel within the contingency period and follow the notice rules in your contract, your deposit is typically refundable. The key is to communicate in writing and meet the deadlines exactly.
If a deal falls through
If you cancel for a reason not allowed by the contract, or you miss a deadline, the seller may be entitled to keep the deposit as liquidated damages if your agreement includes that clause. If it does not, the seller could seek other remedies based on the contract and applicable law, though litigation is uncommon in typical residential cases.
When there is a dispute over escrowed funds, several paths exist:
- Mutual agreement. Buyer and seller agree on how to distribute funds, sometimes after mediation.
- Mediation or arbitration. Many contracts require this to resolve disputes faster than court.
- Interpleader. The escrow holder can deposit the funds with a court and ask a judge to decide.
- Regulatory complaints. If a broker mishandles trust funds, a complaint can be filed with the state regulator. This addresses conduct, not the private contract dispute over who gets the money.
Step‑by‑step for Hollis buyers
Before you make an offer
- Align on strategy. Speak with your local agent about what deposit amounts are customary for Hollis listings at your price point.
- Get pre‑approved. A full pre‑approval supports your financing contingency and strengthens your offer.
- Set your risk level. Larger deposits can be more compelling to sellers, but only commit what you are comfortable placing at stake.
- Choose the escrow holder. Decide whether a title company, attorney, or broker will hold the funds and confirm their contact details.
When you write the offer
- Specify the deposit amount.
- Name the escrow holder and include address and contact information.
- Set the deadline and payment method, such as check or wire.
- List all contingencies with clear deadlines.
- Confirm remedies and dispute resolution language.
Provide the deposit on time and obtain a written receipt from the escrow holder.
During your contingencies
- Track dates for inspection, financing, appraisal, and title.
- Request extensions in writing before a deadline expires if needed.
- If canceling under a contingency, send written notice on time and ask for the deposit release in writing.
Closing or canceling
- At closing, the earnest money is credited toward what you owe.
- If you cancel properly, follow the release instructions in the contract so escrow can return funds promptly.
- If a dispute arises, follow the contract’s process and keep all records, including emails, notices, and reports.
Safety and fraud prevention
Wire fraud can target real estate deposits. Protect your funds with a few habits:
- Confirm wiring instructions by calling a verified phone number for the closing or title company. Do not rely on emailed numbers or links.
- Use dual verification. Confirm by phone and through a separate email channel you trust.
- Consider a certified check when feasible, delivered directly to the named escrow holder.
- Keep copies of checks, statements, escrow receipts, and the contract pages that describe the escrow instructions.
Local resources to know
- Town of Hollis offices for tax and assessment information, and local permitting.
- Hillsborough County Registry of Deeds for property records and deed history.
- Local title and closing companies in the Nashua and Hudson area that commonly handle Hollis transactions.
- New Hampshire Real Estate Commission for guidance on broker trust accounts and a channel for complaints about broker conduct.
- New Hampshire Association of Realtors for standard practice forms.
- Local real estate attorneys for contract review and escrow questions under New Hampshire law.
Smart questions to ask your agent
- What is the customary earnest money amount right now for this Hollis price point?
- Who will hold the deposit and when will it be deposited?
- What are the exact deadlines for each contingency, and what notice is required to cancel?
- Does the contract include a liquidated damages clause that limits remedies?
- How will the deposit be applied at closing, and how will I receive a receipt?
- What is the verified process to prevent wire fraud with this closing agent?
Bottom line
Earnest money is a practical tool that helps your Hollis offer look serious while protecting you through clear contract terms. The right amount depends on local norms and your risk comfort. With clear escrow instructions, documented timelines, and a plan for contingencies, you can compete confidently and keep your deposit safe.
If you want help calibrating your deposit and deadlines to current Hollis conditions, our team is here to guide you from offer to closing with clear steps and steady communication. Connect with Christensen Group, Inc. to discuss your next move.
FAQs
How much earnest money should Hollis buyers put down?
- There is no single rule in New Hampshire. Many buyers use a fixed sum or about 1% to 3% of the price, and some increase the amount in competitive situations to strengthen an offer.
Is earnest money refundable after a home inspection in NH?
- If your contract includes an inspection contingency and you cancel within the deadline using the required written notice, the deposit is typically refunded.
Can a seller keep my earnest money if I back out in Hollis?
- If you breach without a valid contractual reason, the seller may keep the deposit as liquidated damages if your contract allows, or pursue other remedies depending on the agreement.
Who holds earnest money for Hollis home purchases?
- Deposits are usually held in a brokerage trust account, by a title or closing company, or in an attorney trust account, as specified in the purchase agreement.
What happens if there is an earnest money dispute in NH?
- Contracts often require mediation or arbitration; otherwise parties may reach a mutual agreement or the escrow holder can file an interpleader with the court. Broker misconduct can be reported to the state regulator.
