Wondering how earnest money actually works when you buy or sell a home in St. Peters? You are not alone. This small but important deposit can shape how strong your offer looks and what happens if a contract falls through. In this guide, you will learn how much buyers typically put down, who holds the funds in Missouri, what contingencies protect you, and practical steps for both buyers and sellers in St. Peters. Let’s dive in.
What is earnest money
Earnest money is a good‑faith deposit you submit with an offer to show you are serious about buying a home. It is a pledge to follow the timelines and contingencies in your contract. If the deal closes, the deposit is usually credited to your purchase price or closing costs.
If you cancel under a valid contingency, the contract will usually direct the escrow holder to return your deposit. If you breach without a contractual right to cancel, the seller may be entitled to keep the funds, subject to the remedies in the purchase contract.
Typical amounts here
There is no single “right” amount for St. Peters. Buyers commonly see either a flat dollar deposit or a percentage of the price. A practical range is $1,000 to 3% of the purchase price.
Your strategy can depend on price point, inventory, and competition. In tighter markets, a larger deposit can help your offer stand out. Ask your agent what similar recent offers included before you decide.
Who holds the funds
In Missouri, earnest money is commonly held by a neutral title or closing company in an escrow or trust account. Sometimes a real estate broker’s trust account holds the funds. Having the seller hold the deposit is less common and not recommended.
Confirm in writing who the escrow holder is, the account type, and whether the account is interest‑bearing. Ask for a receipt that shows amount, date, who paid, who is holding, and any escrow instructions.
Deposit timing and steps
Your purchase contract will set the deadline. Many residential contracts require deposit on acceptance or within 24 to 72 hours. Plan ahead so your funds arrive on time.
Follow these steps:
- Confirm the amount and payment method the holder will accept, such as certified check or wire.
- Get the exact name and contact for the title company or broker holding the money.
- Deliver funds within the stated deadline and get a written receipt right away.
- Calendar all contingency deadlines so you can act on time if issues arise.
Key contingencies
Certain contract contingencies protect your deposit if you cancel properly within the allowed window. Common protections include:
- Inspection contingency for repairs, negotiations, or cancellation within a set timeline
- Financing or mortgage contingency tied to loan approval
- Appraisal contingency if value does not meet the contract price
- Title contingency for clearable title defects
If you cancel under a valid contingency and follow the notice rules in your contract, your earnest money is typically returned.
If a deal unravels
If the buyer cannot meet obligations and no valid contingency applies, the seller may have remedies. Depending on the contract, that can include keeping the earnest money as liquidated damages or pursuing other remedies.
If the seller defaults, buyers usually can seek the return of the deposit and may pursue specific performance or damages. Read the remedies and escrow‑release sections of your contract carefully and talk with your agent or a local attorney if you have questions.
Handling disputes
Disputes sometimes arise when one party believes a contingency applied and the other disagrees. In that case, the escrow holder will typically keep funds in the account until both parties sign a mutual release or a mediator, arbitrator, or court gives instructions.
Common paths to resolve a dispute include mutual written instructions, contract‑required mediation or arbitration, or a court case. Escrow holders may file an interpleader action to ask a court for direction if needed. Ask the title company about their process for disputed deposits.
Buyer checklist
Before you deposit:
- Confirm deposit amount, delivery method, and deadline in the contract.
- Verify the escrow holder’s name and contact information.
- Deliver funds on time and get a written receipt.
- Calendar inspection, appraisal, and financing deadlines.
- Ask if the account is interest‑bearing and who receives any interest.
If you need to cancel:
- Act within the contingency window and send written notice as the contract requires.
- Keep copies of notices, emails, and receipts.
- Notify your agent and the title company promptly.
At closing:
- Make sure the earnest money credit appears on your closing disclosure.
Seller checklist
Before you accept an offer:
- Review the deposit amount, payment method, and timing.
- Confirm the deposit will be held by a neutral title company or a broker’s trust account.
- Understand your remedies under the contract if the buyer defaults.
If the buyer breaches:
- Review the remedies and dispute sections in your contract.
- Talk with your broker or an attorney before you claim the deposit.
- Do not spend earnest money that is still in dispute or subject to escrow instructions.
Title and closing locally
In St. Peters and across St. Charles County, title companies commonly handle escrow, title searches, and the closing. When the sale closes, they apply your earnest money to the final settlement and coordinate recording with the St. Charles County Recorder of Deeds.
Local agents often recommend title companies familiar with county recording procedures and typical escrow timelines. Ask about wiring instructions, delivery options for checks, and how they handle any disputes.
Risk tips
Protect yourself with a few simple best practices:
- Verify wiring instructions by calling a trusted number for the title company to avoid wire fraud. Do not rely on email alone.
- Keep every receipt and written notice related to your deposit.
- Track all contingency deadlines and send notices on time.
- If contract language is unclear, consult a local real estate attorney.
Ready to talk
If you want local advice on how much to deposit, how to structure contingencies, or how to protect your earnest money, we are here to help. Reach out to The Winckowski Group for clear, timely guidance tailored to St. Peters and St. Charles County.
The Winckowski Group can walk you through your options and help you move forward with confidence.
FAQs
When is earnest money due in St. Peters?
- Most contracts require deposit on acceptance or within 24 to 72 hours; check your specific contract timeline.
Who usually holds earnest money in Missouri?
- A neutral title or closing company typically holds funds in escrow; sometimes a broker’s trust account holds them.
Is earnest money refundable if I cancel?
- It can be refundable when you cancel under a valid contingency and follow notice rules; otherwise it may be forfeited for buyer default.
What if the appraisal comes in low?
- You can renegotiate price, cancel under an appraisal contingency if included and recover your deposit, or bring additional cash to close.
How are disputes over earnest money resolved?
- Escrow holders generally keep funds until a mutual release, mediator or arbitrator decision, or a court order directs disbursement.
What happens to earnest money at closing?
- The title company applies your deposit as a credit toward your purchase price or closing costs on the final settlement.
