Thinking about making an offer on an Ogunquit home or cottage and wondering what “earnest money” really means? You are not alone. Whether you are local or buying from out of state, that first deposit can feel confusing. In this guide, you will learn what earnest money is, how much is typical in Ogunquit, how contingencies protect you, and the steps to keep your deposit safe. Let’s dive in.
Earnest money basics in Ogunquit
Earnest money is a good-faith deposit you include with an offer to show a seller you are serious. It helps bind the deal while you complete inspections, financing, and other steps. If the sale closes, the deposit is usually credited to your down payment and closing costs.
After an offer is accepted, the deposit is delivered as the purchase agreement instructs, often within 24 to 72 hours. Funds are held in escrow. The escrow holder is named in the contract and is often one of these: the listing broker’s trust account, the buyer’s broker trust account, the buyer’s attorney, or a title or closing company. Your contract should state how the deposit will be applied at closing and when it may be released or forfeited.
Ask whether the deposit will earn interest. In many cases, small deposits in broker trust accounts do not earn interest for the buyer. Larger or attorney-held accounts may follow different rules. Confirm the details with the escrow holder and your purchase agreement.
Typical deposit amounts here
Across the U.S., many buyers offer a flat amount for lower-priced homes or a percentage of the price, often 1 to 3 percent. In Ogunquit, a coastal market with limited inventory and seasonal activity, you will see a range based on property type and competition.
- Lower-priced or non-competitive listings: a few thousand dollars is common, such as 1,000 to 5,000.
- Typical primary-residence purchases: about 1 to 3 percent of the purchase price.
- Higher-priced coastal or second-home properties, or multiple-offer situations: deposits can be larger, sometimes several thousand up to 5 to 10 percent in aggressive offers.
These are working ranges, not rules. Local norms shift with inventory, season, and mortgage rates. If you are unsure, talk through recent Ogunquit sales and current competition before you set your number.
When to go smaller or larger
You might choose a smaller deposit if your offer includes full contingencies and the listing is not competitive. You might choose a larger one if you want to stand out, are shortening timelines, or the seller is seeking extra assurance. A larger deposit can strengthen your offer, but it also raises your risk if you miss deadlines or waive protections.
How contingencies protect you
Contingencies let you cancel without losing your deposit if certain conditions are not met within agreed timeframes. They are your main protection. Deadlines matter. If a deadline passes without action, you may waive that protection.
Inspection contingency
An inspection contingency gives you time to evaluate the property and either negotiate repairs or cancel. In many Ogunquit deals, buyers allow 7 to 14 days, but timing varies. If you are out of state, request a realistic window and line up a local inspector early. Deliver any repair requests or termination in writing by the deadline.
Financing contingency
A financing or mortgage contingency protects you if you cannot secure loan approval within the set period. Work closely with your lender on documentation and timing. If approval is not in hand by the deadline, you may need to request an extension in writing before it expires.
Appraisal contingency
If the appraisal comes in below the contract price and the seller will not adjust, this contingency lets you cancel and keep your deposit. If you plan to cover a gap, spell that out clearly.
Title and condo review
A clear title contingency covers liens, easements, or other defects that show up in title work. You can cancel if issues cannot be cured before closing. If you are buying a condo or a home with an association, add time to review governing documents and budgets. Cancel in writing if you find unacceptable concerns within the allowed period.
Sale-of-home contingency
This clause is less common in competitive settings and can weaken an offer if sellers prefer fewer strings. If you need it, consider offsetting with stronger terms elsewhere.
Refundable vs. at-risk scenarios
Your deposit is usually refundable if you cancel properly under an active contingency. It is also refundable if the seller cannot meet contract obligations, such as delivering marketable title, or if both sides sign to cancel.
Your deposit is at risk if you default without a valid contract reason, miss a deadline, or waive a contingency and later back out. In some contracts, a liquidated damages clause may limit the seller’s remedy to keeping the deposit. Read your agreement carefully so you know what applies.
If there is a dispute about whether a cancellation is valid, the escrow holder typically keeps funds in place until there is a mutual agreement or a dispute resolution outcome. Many contracts outline steps for mediation, arbitration, or allow the escrow holder to deposit funds with the court if needed.
Out-of-state buyer tips
Buying from afar adds timing pressure. Time zones, travel, and scheduling can make short windows tricky. Build in realistic periods for inspections and appraisals. Arrange for local inspectors and contractors early. Keep all notices and approvals in writing. If you plan to visit, set key dates in your offer to match your travel.
Step-by-step: protecting your deposit
Before you write the offer
- Ask who will hold the funds, how, and where they will be deposited.
- Choose a deposit size that fits the property and competition.
- Set contingency periods you can meet. Confirm inspection, appraisal, and financing timelines with your pros.
- Consider attorney review, especially for higher-value coastal purchases or if you are unfamiliar with Maine contracts.
After acceptance
- Deliver the deposit within the contract deadline, often 24 to 72 hours.
- Calendar every contingency date and deliverables.
- Order inspections immediately and confirm access with the listing side.
- Keep communication in writing. Track requests, approvals, and any extensions.
In multiple-offer situations
- Weigh the tradeoff of a higher deposit or waived contingencies against the risk to your funds.
- If you prefer to keep protections, consider other concessions sellers value, such as flexible occupancy or an escalation clause.
- Ask about realistic close timelines that fit the seller and your lender.
At closing or if you cancel
- Verify the deposit credit on your closing statement.
- If the deal cancels under a contingency, confirm the release in writing and the return timeline.
Common mistakes to avoid
- Missing a contingency deadline because of travel or time zones.
- Assuming a large deposit is always required. Size should match the situation.
- Waiving the inspection without a plan for risk. If you waive, consider other safeguards.
- Failing to confirm who holds escrow and how disputes are handled.
What this means for Ogunquit buyers
In a small, coastal market with seasonal rhythms, a strong earnest money plan helps you move with confidence. Choose a deposit amount that supports your offer without stretching your comfort. Keep contingencies tight but realistic, and never miss a deadline. Most of all, use the contract to protect your funds and your goals.
If you want local guidance tailored to Ogunquit and Southern Maine, work with an advisor who understands second-home dynamics and coastal nuances. For clear steps, realistic timelines, and offer strategies that fit this market, connect with Brooke Peterson.
FAQs
How much earnest money do Ogunquit sellers expect?
- Many primary-residence offers land around 1 to 3 percent, while competitive coastal or second-home deals may call for more. Match your deposit to property and demand.
Who holds earnest money in a typical Ogunquit deal?
- The escrow holder may be the listing broker, buyer’s broker, a buyer’s attorney, or a title or closing company. The purchase agreement names the holder.
How fast do I need to deliver my deposit after acceptance in Ogunquit?
- Many contracts require delivery within 24 to 72 hours. Check your agreement and meet the deadline.
What contingencies protect my earnest money in coastal purchases?
- Inspection, financing, appraisal, and clear title contingencies are common. Condo or HOA review applies where relevant.
When is earnest money refundable if I am buying from out of state?
- If you cancel properly under an active contingency or the seller cannot meet contract terms, your deposit is typically refundable. Keep every notice in writing.
What puts my earnest money at risk in Ogunquit?
- Missing a deadline, canceling after waiving a contingency, or defaulting without a contract reason can put the deposit at risk. Know your dates and obligations.
