Buying a home in Overland Park and hearing a lot about earnest money? You are not alone. Your deposit can help you win the house you love, but you also want to protect it. In this guide, you will learn what earnest money is, how it works in Johnson County, what affects the amount, and the steps to keep your funds safe from contract hiccups or wire fraud. Let’s dive in.
Earnest money, simply explained
Earnest money is a deposit you give after your offer is accepted to show you are serious. It gives the seller short-term security while you complete inspections, financing, and other steps. If the sale closes, the money is credited to your cash to close. It is not the same as your down payment or closing costs, although it is applied toward them at closing.
How it works in Overland Park
Where your deposit is held
In Johnson County, the purchase contract names the escrow holder, often a title or escrow company. Sometimes a broker’s trust account holds the funds. In Kansas, brokers and escrow agents must follow Kansas Real Estate Commission rules for trust accounts, including prompt deposit and accurate records.
When you deposit it
Most contracts require delivery within a set number of business days after mutual acceptance. One to three business days is common. Always get a receipt from the escrow holder. Contract deadlines usually count from the date of mutual acceptance, not the date of deposit, unless your contract says otherwise.
How much to offer
There is no Kansas law that sets an amount. In balanced markets, buyers often offer around a small percentage of the price or a flat dollar amount agreed by both parties. In multiple-offer situations, buyers may increase the deposit to strengthen their offer. Your strategy should match the current Overland Park market and your comfort with risk.
How to pay and stay safe
Title companies typically accept personal checks, cashier’s checks, certified checks, or wires. Wire transfers are fast but carry fraud risk. Always verify wiring instructions by calling the escrow or title company at a known, trusted phone number. Do not rely on email links for instructions. Keep a dated receipt or confirmation for your records.
Contingencies that protect your deposit
Several standard contingencies can make your earnest money refundable if you follow the contract’s process and timelines.
Inspection contingency
You usually have a set window to inspect the home. If you discover issues and cannot reach an agreement on repairs or credits, you can terminate within the allowed period and recover your deposit if your contract allows it.
Financing contingency
If you apply in good faith and cannot secure your loan within the contract’s timeframe, you may cancel and receive a refund if the contract conditions are met.
Appraisal contingency
If the appraisal comes in below the purchase price and the parties cannot adjust the price or terms, the contract may allow you to cancel and recover your deposit.
Title contingency
If a title defect arises and cannot be cured within contract terms, you can usually terminate and receive your funds back.
Sale-of-home contingency
If your contract depends on selling your current home and that sale does not happen in time, you may be able to cancel and get your deposit back if the contract permits it.
When a seller may keep earnest money
Liquidated damages and contract terms
If you breach the contract after contingencies expire, the seller may be entitled to keep the deposit as liquidated damages, but only if the contract includes that remedy. Some forms say the deposit is the sole remedy. Others allow the seller to pursue different remedies. Your exact contract language controls the outcome.
Release and dispute procedures
Contracts usually say the escrow holder needs written instructions from both parties, a court order, or instructions that match the contract to release funds. If you and the seller disagree, the escrow holder may hold the money until you reach a mutual release or a court decides. Some contracts include mediation or arbitration to resolve earnest money disputes faster.
Deadlines, notices, and timing
Contracts set clear deadlines for inspections, financing, appraisals, and title review. Many include a time is of the essence clause, which makes timing critical. Missing a notice deadline can change whether the deposit is refundable. Put every notice in writing and keep delivery proof.
Buyer checklist: protect your deposit
- Confirm the named escrow holder and verify wire instructions by phone to a known number.
- Keep funds accessible so you can deposit within the contract deadline.
- Deliver funds by the method in your contract and get a dated receipt.
- Calendar contingency windows and deliver all notices in writing on time.
- Ask your agent to explain the contract’s earnest-money and liquidated-damages terms.
- Consider legal counsel before agreeing to non-refundable deposits or waiving common contingencies.
Seller checklist: safeguard your position
- Confirm the earnest-money amount and deposit deadline in the accepted contract.
- Know whether your contract treats the deposit as liquidated damages or just security.
- If you suspect buyer default, seek guidance before trying to keep the deposit. Escrow holders often need mutual instructions or a court order.
Local context in Johnson County
Overland Park is part of the greater Kansas City market, and norms shift with competition. In hotter conditions, buyers may offer larger deposits or agree to tighter timelines. In slower periods, smaller, fully refundable deposits are more common. Local contract forms and title company practices guide how deposits are held and released, and KREC rules govern how brokers handle trust funds. Your strategy should reflect current conditions in your price range and neighborhood.
The bottom line
Earnest money helps you signal commitment and secure a home in Overland Park. The right amount and the right protections depend on your contract language, contingency windows, and market conditions. If you manage deadlines and verify wiring instructions, you can compete confidently while keeping your deposit safe.
If you want a clear plan for earnest money and contract timing in your price range, connect with the local team that manages these details every day. Request your personalized home valuation and start a conversation with Bash KC.
FAQs
How does earnest money work in Overland Park, KS?
- It is a good-faith deposit held by a named escrow holder, usually a title company, then credited to you at closing if the sale completes.
How much earnest money should I offer in Johnson County?
- There is no fixed rule. Many buyers offer a small percentage or a flat amount, and increase it in competitive situations based on advice from a local agent.
Who holds my deposit and is it protected?
- A title or escrow company or a broker trust account holds the funds. In Kansas, KREC rules require proper trust-account handling and recordkeeping.
Can I get my deposit back after a bad inspection?
- Usually yes if your contract includes an inspection contingency and you terminate or negotiate within the allowed timeframe and procedures.
What happens if a buyer backs out after contingencies expire?
- The seller may keep the deposit as liquidated damages if the contract says so. Otherwise, the seller may pursue other remedies under contract and Kansas law.
