Not sure how much to put down as earnest money on a Mount Pleasant home? You want to make a strong offer without risking more than you need. Understanding South Carolina’s due diligence fee, how earnest money works, and what is refundable can help you write a confident, competitive offer. In this guide, you’ll learn typical amounts, timelines, and practical steps to protect your deposit in Mount Pleasant. Let’s dive in.
Earnest money, simplified
Earnest money is a buyer deposit that shows good faith to the seller. It is placed in a neutral escrow or trust account while the contract is active and is credited to you at closing. In South Carolina, the escrow holder is typically a title company, closing attorney, or brokerage trust account.
The deposit is due after both parties sign the contract, which is called ratification. Most deadlines in your contract are measured from this date.
Key items to locate in your South Carolina residential contract:
- The earnest money amount and who will hold it in escrow.
- The deadline to deliver your earnest money after ratification.
- Any due diligence fee amount and the length of the due diligence period.
- Contingencies and the exact steps and deadlines for termination.
The SC due diligence fee explained
South Carolina uses a due diligence fee in many contracts. This is separate from earnest money.
- You pay the due diligence fee directly to the seller in exchange for an unrestricted right to terminate during the due diligence period.
- This fee is usually non-refundable once paid. If you end the contract during due diligence, you typically lose this fee but may receive your earnest money back, depending on the contract language.
- The due diligence period is the window when you complete inspections and other checks and decide whether to move forward.
Typical amounts in Mount Pleasant
Mount Pleasant is a high-demand submarket in the Charleston area. That often leads buyers to offer stronger deposits and due diligence fees to compete. Exact numbers vary by price point, neighborhood, and current market conditions.
Earnest money
- A common national baseline is 1 to 2 percent of the purchase price. In Mount Pleasant, that guideline is useful but often adjusted.
- Practical dollar ranges: about 1,000 to 5,000 dollars for modest single-family homes, and 5,000 to 20,000 dollars or more for higher-priced homes, especially when competition is strong.
- In very competitive situations, some buyers offer 3 to 5 percent or more to strengthen their offer.
Due diligence fee
- In Mount Pleasant, 1,000 to 5,000 dollars is common for many homes.
- For higher-priced or highly competitive properties, 5,000 to 10,000 dollars or more may appear.
These are patterns, not rules. Your best number depends on the property, your budget, and the seller’s expectations.
Key timelines to track
- Earnest money delivery: typically due within 1 to 5 business days after ratification. Three business days is a frequent standard. Your contract controls the exact timeline.
- Due diligence period: often 7 to 14 days. Shorter periods, such as 3 to 5 days, may be used in bidding wars, while longer periods may be negotiated for more inspection time.
- Closing timeline: usually 30 to 45 days, depending on inspections and financing.
Always follow the contract’s notice and delivery instructions exactly. Keep proof of every payment and written receipt from the escrow holder.
How contingencies protect your deposit
Your contract may include several protections that help you recover earnest money if you terminate properly and on time. Read the forms closely and follow the steps for notice and deadlines.
During due diligence
- You can inspect and evaluate the property.
- If you terminate within the due diligence window using proper notice, you typically forfeit the due diligence fee but receive your earnest money back, subject to the contract terms.
Financing contingency
- If you cannot obtain financing despite good-faith efforts and you terminate within the financing contingency timeline, your earnest money is typically refundable.
- Missing the financing deadline or failing to act in good faith can put your earnest money at risk.
Appraisal contingency
- If the appraisal is below contract price and you have an appraisal contingency, you can negotiate price, bring additional funds, or terminate within the contingency period.
- Proper, timely termination under this contingency usually returns your earnest money.
Common outcomes when deals change
- You terminate during due diligence using proper notice
- Typical outcome: your earnest money is refunded and the seller keeps the due diligence fee.
- You terminate under a financing contingency, in good faith and on time
- Typical outcome: your earnest money is refunded.
- The appraisal is low and you terminate under an appraisal contingency
- Typical outcome: your earnest money is refunded if you follow the contract terms and deadlines.
- You fail to close without a valid contingency after due diligence ends
- Possible outcomes: the seller may keep the earnest money as liquidated damages if the contract provides, or pursue other remedies.
- The seller defaults, such as a title issue the seller will not cure
- Typical outcome: your earnest money is returned and you may have other contractual remedies.
- Mutual release
- If both parties agree, you can sign a mutual release instructing the escrow holder how to disburse the earnest money.
Who holds earnest money and how to pay
Escrow holders in South Carolina are neutral third parties. They are often a title company, a closing attorney, or a brokerage trust account. The contract names the escrow holder and includes instructions for delivery and release.
- Confirm who will hold the earnest money before you send funds.
- Deliver the deposit on time and obtain a written receipt from the escrow holder.
- Keep bank confirmations and all communication in writing.
If you have concerns about which escrow agent to use, you can request recommendations for Charleston-area title companies or attorneys experienced with Mount Pleasant closings.
Buyer checklist for Mount Pleasant
- Decide your earnest money amount based on local norms and your comfort with risk if you default. Bigger deposits can strengthen your offer but increase exposure.
- Select a due diligence period that fits your inspection and lender timelines, then pair it with a fair due diligence fee for the seller.
- Align your financing and appraisal contingency deadlines with your lender’s schedule.
- Confirm the escrow holder and deposit deadline in your offer. Put both in writing.
- Pay the earnest money promptly and get a receipt. Save proof of all payments.
- Track every deadline from ratification to closing. Use calendar reminders.
- If making a strong, low-contingency offer, make sure your lender pre-approval and documents are ready and confirm appraisal expectations.
- Consult your agent about recent Mount Pleasant offer trends so your deposit and due diligence fee are competitive.
Escrow flow at a glance
Scenario A: You cancel during due diligence
- You sign the contract, pay the due diligence fee to the seller, and deposit earnest money into escrow.
- You inspect and review during due diligence.
- If you terminate on time and in writing, the seller keeps the due diligence fee and your earnest money is refunded from escrow.
Scenario B: You close on the home
- You sign the contract, pay the due diligence fee, and deposit earnest money into escrow.
- Inspections and financing are completed.
- At closing, the escrow holder applies your earnest money to your down payment or closing costs.
Scenario C: You default after due diligence without a valid contingency
- You signed and deposited funds as above.
- If you fail to close without protection from a contingency, the contract may allow the seller to receive your earnest money as liquidated damages.
Local insight for a competitive market
Mount Pleasant’s strong demand often rewards buyers who balance risk with clarity. Larger earnest money and meaningful due diligence fees can help in multiple-offer situations, while tight timelines show commitment. The right strategy depends on the property, seller priorities, and current conditions. Ask for recent examples from local transactions to gauge what is winning today.
Ready to tailor a deposit and due diligence plan to your goals, budget, and timeline in Mount Pleasant? Connect with Nicole Lemieux for a calm, step-by-step approach from offer to closing.
FAQs
What is the difference between earnest money and the due diligence fee in South Carolina?
- Earnest money is a refundable deposit held in escrow and credited at closing, while the due diligence fee is paid to the seller for your right to terminate during the due diligence period and is usually non-refundable.
How much earnest money should I put down in Mount Pleasant?
- Many buyers start around 1 to 2 percent of price, with 1,000 to 5,000 dollars common for modest homes and 5,000 to 20,000 dollars or more for higher-priced homes; very competitive offers may reach 3 to 5 percent.
How soon do I need to deliver earnest money after my offer is accepted?
- Contracts often require delivery within 1 to 5 business days after ratification, with three business days frequently used; your exact deadline is set in the contract.
Will I get my earnest money back if I back out after inspections or if my loan is denied?
- If you terminate within the due diligence window or under a financing contingency and follow notice rules, the earnest money is typically refunded, while the due diligence fee is usually forfeited.
What happens to earnest money if the seller defaults or cannot provide clear title?
- If the seller breaches or cannot cure a title problem, buyers are typically entitled to the return of earnest money and may have other remedies under the contract.
Who holds the earnest money and can I choose the escrow holder?
- A neutral third party, such as a title company, closing attorney, or brokerage trust account, holds the funds; the contract names the holder and you can request a specific option during negotiations.
Can the buyer and seller split the earnest money if the deal is canceled?
- Yes, if both parties sign a mutual release instructing the escrow holder how to disburse funds, the money can be returned, split, or paid to one party as agreed.
How can I protect myself from losing earnest money?
- Track all deadlines from ratification, follow notice requirements exactly, keep written receipts, and make sure your contingencies and timelines match your inspection and lender needs.
When should I consult an attorney about an earnest money dispute?
- If a dispute arises or the amounts are significant, consult a South Carolina real estate attorney to review the contract and advise on next steps.
