Putting thousands of dollars on the line can feel intimidating when you write an offer. You want your offer to stand out in Hurricane without risking money you cannot afford to lose. If you understand how earnest money works in Utah, you can write a strong offer and protect your deposit at the same time. In this guide, you will learn what earnest money is, how much to offer in Hurricane, the Utah REPC contingencies that make deposits refundable, and the steps that keep you on track. Let’s dive in.
What earnest money means in Utah
Earnest money is a good-faith deposit you pay after your offer is accepted. It shows the seller you are serious and gives both sides time to complete inspections, loan approval, appraisal, and title work. At closing, that deposit is applied to your down payment or closing costs. If the contract terminates under a protected contingency, it is generally returned to you.
In Utah, the deposit is usually held by the escrow agent named in the Real Estate Purchase Contract (REPC). This is often a title or escrow company. The REPC controls how the money is handled, when it can be released, and what happens if either party defaults.
If a buyer fails to close without a valid contractual reason, the REPC may allow the seller to keep the earnest money as liquidated damages. Whether that applies depends on the specific contract language. Always follow the REPC and the deadlines it sets.
How much to offer in Hurricane
There is no single required amount, but typical deposits often fall between 1% and 3% of the purchase price. For lower-priced homes, a fixed amount in the low thousands is common. In more competitive scenarios, some buyers raise the deposit toward 3% to 5% to strengthen their offer.
In Hurricane and greater Washington County, the right number depends on price point and market conditions. During hotter periods with multiple offers, a larger deposit can help your offer look stronger. In a balanced market, a standard 1% to 3% range is often enough. Remember that a bigger deposit can improve the seller’s confidence, but it also increases your exposure if you later default without protection.
REPC contingencies that protect your deposit
Contingencies are your safety nets. They outline conditions that must be met for the sale to proceed. If a contingency is not satisfied and you terminate within the deadline and follow the REPC notice rules, your earnest money is typically refundable.
Financing contingency
If you cannot obtain loan approval by the date in the REPC and you give proper written notice on time, you can usually terminate and receive your earnest money back. Work closely with your lender to track this date.
Inspection and investigation contingency
Utah’s REPC gives you a defined investigation period. If inspections reveal issues you cannot accept and you terminate within the inspection deadline, your earnest money is generally refundable. Keep your notices in writing and make sure they are delivered before the deadline.
Appraisal contingency
If the appraisal comes in below the contract price, the REPC may give you options. You can renegotiate, proceed by covering the gap, or terminate within the allowed time. If you terminate properly, your deposit is commonly refunded.
Title and HOA document review
You receive time to review title work and any HOA documents. If you find unacceptable issues and you object or terminate in writing before the deadline, your earnest money is usually protected.
Seller disclosures
If required disclosures reveal material problems and you terminate as the contract allows, you should receive your earnest money back.
Sale of your current home
If your offer includes a contingency for the sale of your home and it does not sell by the date specified, you can typically terminate within the contract rules and preserve your deposit.
Timing and notice drive refundability
In Utah, deadlines and written notices are decisive. If you miss a deadline or do not send notice in the way the REPC requires, your termination may be ineffective. That can put your deposit at risk.
If you remove contingencies, pass key deadlines, or cancel for convenience without contractual protection, the seller may be entitled to the earnest money. The REPC sets out how disputes are handled. If you and the seller disagree about who should receive the funds, the escrow agent will usually hold the money until there is a mutual written agreement or an order through mediation, arbitration, or court.
A simple timeline from offer to closing
Your exact dates will be written into the REPC. Here are the milestones you should expect to track:
- Earnest money due date. Your payment is often due within a few days of acceptance. Meet this date to avoid default.
- Investigation and inspection period. Complete inspections, request repairs or credits, or terminate before the deadline if needed.
- Financing or loan commitment date. Get lender approval by this date or use the contingency as written.
- Appraisal deadline. Address value issues within the window allowed by the REPC.
- Title and HOA review windows. Read documents promptly and raise objections in writing by the deadline.
- Closing date. Your earnest money is applied to your costs, and you receive the keys after recording.
Local inspection focus in Hurricane
Hurricane sits in a growing part of southern Utah with a mix of new and older homes, rural parcels, and properties with unique systems. During your inspection period, you and your inspector may give extra attention to:
- Roof condition and water intrusion.
- Septic or private water systems when applicable.
- Irrigation or well considerations for certain lots.
- Foundation, grading, and drainage around the home.
If inspections uncover material issues you cannot resolve, you can terminate within the inspection window to protect your deposit.
Smart ways to reduce risk of forfeiture
A few practical habits go a long way toward safeguarding your earnest money:
- Put every contingency in writing with realistic timelines.
- Calendar all deadlines on day one. Include delivery cutoffs for notices.
- Send notices in the form the REPC requires and keep proof of delivery.
- Do not remove contingencies until financing, appraisal, and inspections are acceptable.
- Confirm who holds your deposit and get the escrow contact details.
- Document inspection findings and all communications.
- If you are unsure about contract language or a large deposit, consider consulting a licensed Utah real estate attorney.
Real-life examples you might see
These sample scenarios reflect common situations in Hurricane and similar markets:
- Inspection issue, timely termination. You offer $420,000 with a 2% deposit. A roof leak shows up during the inspection window. You terminate in writing before the deadline. Result: your earnest money is refunded.
- Low appraisal, contingency used. You are under contract at $500,000 with a 2% deposit. Appraisal returns at $475,000. You notify the seller within the appraisal timeline and choose to terminate. Result: deposit returned.
- Contingencies removed, financing fails. You are under contract at $350,000 and remove all contingencies early. Your loan later falls through. Result: the seller may keep the earnest money as liquidated damages if the REPC allows it.
- Missed deadline, otherwise valid reason. You find a serious issue but miss the termination date by a day. Result: your right to a refund can be lost due to late notice.
How much should you deposit here in Hurricane?
Start with the 1% to 3% range or a fixed amount in the low thousands for entry-level homes. Then adjust to the property and market. If you are competing with multiple offers or pursuing a highly desirable home, you may choose a larger deposit to signal strength. Balance that with careful contingency planning so your protections match the size of your deposit.
What happens if there is a dispute
If the buyer and seller disagree about who gets the earnest money, the escrow holder will usually keep the funds until both parties sign a written release or there is an order through the dispute path defined in the REPC. That can include mediation, arbitration, or court. Litigation is a last resort and can be expensive, so clear communication and precise notices are your best defense.
Your next step
Earnest money should give you leverage, not anxiety. With the right amount, well-planned contingencies, and disciplined timing, you can write a confident offer in Hurricane and protect your deposit from start to finish.
If you want a calm, step-by-step plan for your next offer, reach out to Brett Taylor. You will get practical guidance shaped by title and escrow experience, construction insight, and a service model built for clear outcomes.
FAQs
What is earnest money in Utah home purchases?
- It is a good-faith deposit held by an escrow agent under the REPC, applied to your closing costs or refunded if you terminate under a valid contingency within the deadline.
How much earnest money is typical in Hurricane, UT?
- Many buyers offer about 1% to 3% of the price or a fixed amount in the low thousands, with higher deposits used in competitive or higher-priced situations.
When is earnest money refundable under the REPC?
- It is usually refundable if you terminate within a contingency period, such as inspection, financing, appraisal, title, HOA review, or a sale-of-home contingency, using proper written notice.
Can a seller keep my deposit if I cannot close?
- If you remove protections or miss deadlines and then fail to close, the seller may be entitled to the earnest money as liquidated damages depending on the REPC language.
Who holds the earnest money in Hurricane transactions?
- The escrow agent named in the REPC, often a title or escrow company, holds the funds and releases them only under the contract’s instructions or a mutual written release.
Does title insurance protect my earnest money?
- No, title insurance protects against title defects, not deposit forfeiture; use contract contingencies and timely notices to protect your earnest money.
What if the appraisal comes in low?
- If the REPC includes an appraisal or financing contingency and you act within the deadline, you can negotiate or terminate and typically receive a refund of your deposit.
