Buying in Darien and not sure how much earnest money to put down? You are not alone. That first deposit can feel like a lot of risk, especially if you are new to Connecticut or moving from the city. In this guide, you will learn what earnest money is, how escrow works in our attorney-closing state, typical amounts in Darien, key deadlines, and smart ways to write a strong yet protected offer. Let’s dive in.
Earnest money basics in Connecticut
What it is and why it matters
Earnest money is a good-faith deposit you include with your offer to show the seller you are serious. It is not an extra fee. If you close, the deposit is applied to your down payment or closing costs. Your contract explains when it is refundable, when it is not, and how it is handled during the transaction.
Typical amounts in Darien
Earnest money in Darien often follows price and competition. A common rule of thumb is 1% to 3% of the purchase price. For smaller homes, fixed amounts like $5,000 to $25,000 appear often. In competitive or higher-priced situations, buyers may offer larger sums or structure additional deposits to stand out.
Local norms vary by neighborhood, property type, and seller expectations. Your agent can calibrate the right number based on recent comparable sales and current activity.
Refundable vs. forfeitable
Your contract controls what happens to the deposit. Many contracts allow a refund if certain contingencies are not satisfied, such as inspection, financing, appraisal, attorney review, or title. If a buyer defaults without an applicable contingency, the contract may allow the seller to keep the deposit as liquidated damages or pursue other remedies. Read the escrow and default sections of your contract carefully with your attorney.
Escrow in an attorney-closing state
Who holds the deposit
Connecticut is an attorney-closing state. Attorneys commonly prepare closing documents, review title, coordinate municipal lien searches, and handle settlement. Earnest money is typically held in escrow by one of the following:
- The listing broker’s trust account
- The buyer’s or seller’s attorney
- A title company or settlement agent
Brokers and attorneys must follow strict trust account rules. Your contract will state who holds the funds.
When you deposit
The contract sets the timeline for delivery, often within a few business days after the offer is accepted. Plan ahead so your funds are ready to wire or deliver by check according to the escrow instructions.
Release and disputes
The escrow holder releases funds based on the contract and written instructions from the parties. If a dispute arises, the paths to resolution can include negotiation between the parties, any contract-specified mediation or arbitration, or litigation. Some contracts limit the seller’s remedy to keeping the deposit, while others allow additional damages. Your attorney can advise you on the implications before you sign.
Key timelines in Darien contracts
While timelines are negotiated, here are ranges often seen locally:
- Earnest money delivery: within a few business days after acceptance
- Attorney review: commonly 3 to 5 business days
- Inspections: often 7 to 14 days from ratification
- Mortgage commitment: usually 30 to 45 days
- Appraisal: coordinated with the mortgage timeline
- Closing: often 30 to 60 days from acceptance, with many conventional purchases in the 30 to 45 day range
Your attorney or title company will also coordinate municipal searches, including any local items like tax and sewer assessments that can affect the schedule.
Contingencies that matter in Darien
Standard protections
Most offers include core contingencies that protect you if something material changes:
- Attorney review
- Home inspection
- Financing or mortgage commitment
- Appraisal
- Title
- Sale or settlement of your current home (less common in competitive situations)
Coastal and property-specific considerations
Darien includes coastal and near-water neighborhoods. You should review flood maps, elevation information, and potential flood insurance requirements with your lender and insurer. Some homes may be on septic rather than sewer, so septic inspections or certifications can be important. If you plan renovations, factor in local zoning, wetlands, and coastal setback considerations. Build time into your due diligence to review these items.
Strategy in competitive markets
To strengthen your offer, you can shorten certain timelines or focus inspection negotiations on major issues. Some buyers use an inspection for informational purposes only to be more competitive, though that reduces leverage. Others add appraisal gap language rather than waiving the appraisal contingency entirely. Waiving protections increases risk, so align your approach with your financial capacity and comfort level.
Real-world examples
These illustrative scenarios reflect structures often seen in Darien. Your exact terms should fit the property and market conditions.
Example A: Mid-range Darien single-family at $700,000
- Earnest money: about $7,000 to $15,000 (1% to 2%)
- Inspection period: 10 business days
- Financing contingency: 30 to 45 days for mortgage commitment
- Appraisal contingency: included, with buyer covering a small gap (for example, up to $5,000)
Example B: Higher-end waterfront at $2,000,000
- Earnest money: $40,000 to $100,000 (2% to 5% or more if competition is strong)
- Shorter attorney review and inspection windows, for example, 5 business days, while retaining protection for major defects
- Some buyers add a non-refundable additional deposit after inspections to stand out. This carries significant risk and should be used only with legal guidance.
Example C: Multiple-offer situation
- Larger earnest money and minimal contingencies
- Proof of funds or a strong preapproval letter
- Flexible closing date
- To balance strength and protection, consider an appraisal gap capped at a fixed amount rather than a full waiver
Buyer checklist for Darien
Use this quick checklist to stay organized and competitive:
- Secure a strong lender preapproval and gather proof of funds.
- Decide on an earnest money amount and whether any portion would become non-refundable at a milestone.
- Confirm who holds escrow and the delivery method. Calendar the deposit deadline from the contract.
- Set realistic inspection and attorney review windows. Identify needed inspections, including septic or coastal considerations when applicable.
- Coordinate with your lender on appraisal and financing timelines. Discuss whether appraisal gap coverage fits your budget.
- Review contract language with your attorney, including remedies and escrow release conditions.
- Keep open communication between your agent, attorney, lender, and inspector to meet every deadline.
Risks and precautions
Common dispute scenarios
- Buyer fails to close or remove contingencies and is in default
- Seller refuses to close in violation of the contract
- Missed or unclear notice deadlines that create disagreement over who is entitled to the deposit
Clear documentation and on-time notices reduce the chance of escrow disputes.
Smart precautions for buyers
- Work with a Connecticut real estate attorney experienced in closings
- Verify escrow instructions and keep deposit receipts
- Confirm insurance needs, including flood, early in the process
- Lean on a local agent for town-specific context, including coastal rules and sewer or septic details
The bottom line
In Darien, earnest money is your signal of commitment and a key lever in a competitive market. Amounts often fall in the 1% to 3% range, but the right number depends on the property, your goals, and the level of competition. Structure your offer so it is strong and still aligned with your risk tolerance. With the right mix of deposit size, timelines, and contingencies, you can protect yourself and win the home.
If you are weighing your options or preparing an offer in Darien or nearby Gold Coast communities, connect with a trusted local advisor. Reach out to Stephanie O'Grady for a thoughtful strategy that fits your budget, timing, and comfort level.
FAQs
What is earnest money in a Connecticut home purchase?
- It is a good-faith deposit credited to your funds at closing, held in escrow and governed by your contract’s contingency and default terms.
How much earnest money is typical for a $1 million Darien home?
- Many buyers target 1% to 3%, which would be $10,000 to $30,000, adjusted for competition and seller expectations.
Who holds earnest money in Connecticut transactions?
- The listing broker, an attorney for either party, or a title company typically holds the funds in a trust or escrow account stated in the contract.
How quickly do I need to deposit after acceptance?
- Contracts often require delivery within a few business days of mutual acceptance, so have funds ready to wire or submit promptly.
When can I get my deposit back if a deal falls through?
- If your contract contingencies are not satisfied, such as inspection, financing, appraisal, attorney review, or title, a refund is commonly permitted under the contract terms.
Should I make part of my deposit non-refundable to win in Darien?
- Some buyers do in very competitive situations after inspections, but it increases risk. Align with your attorney’s advice and your financial comfort.
