Guide · Buying
How much earnest money do I need to buy a house in Kansas?
There is no set amount of earnest money in Kansas. It is negotiated between the buyer and the seller as part of the offer, and around Wichita it often runs about one percent of the purchase price, sometimes a flat amount on lower-priced homes. The check goes to the title company, not the seller, and at closing it is credited toward your down payment and closing costs.
What earnest money is for
Earnest money is a deposit that shows the seller you mean it. When a seller accepts your offer, they take the house off the market and turn away other buyers. If you walk away for a reason the contract does not allow, the seller may keep it. If you close, it is simply money you already paid toward the house. It is not an extra fee, and in a normal sale it is not lost money.
Where the money goes
In Kansas, closings are usually handled by a title company, and the title company usually holds the earnest money too. It goes into an escrow account within a day or two of the contract being signed. The seller does not touch it. Neither does your agent.
At closing, the title company shows the deposit as a credit on your settlement statement. You bring the rest of your down payment and closing costs.
When you get it back, and when you do not
A standard purchase contract has contingencies, which are conditions that let you cancel and get your deposit back. The common ones are inspection, financing and appraisal. Each has a deadline written in the contract.
If the inspection turns up a problem and you cancel within the inspection period, you generally get the deposit back. If your loan is denied and you cancel within the financing period, same thing. If you change your mind after the deadlines have passed, or miss a deadline, the seller can make a claim on the deposit.
Both sides usually have to sign a release before the title company pays it out. If they disagree, it can sit there until they work it out or a court decides. That is a question for your attorney.
How much is enough
The one percent figure is a local habit, not a rule. On a lower-priced home, a flat amount is common because one percent would be very small. In a competitive situation, a buyer sometimes offers more to show strength, and sellers notice.
More is not always better for you, though. A larger deposit means more at risk if something goes sideways. Offer what you are comfortable putting at stake, and make sure the contingencies and deadlines protect you. Here is how it fits with the rest of the money in a purchase.
| Payment | When | Where it goes |
|---|---|---|
| Earnest money | Within a day or two of acceptance | Title company escrow, credited at closing |
| Inspection fee | During the inspection period | Paid to the inspector, not refundable |
| Appraisal fee | When the lender orders it | Paid to the lender or appraiser, not refundable |
| Down payment and closing costs | At closing | Title company, minus the earnest money already held |
Earnest money at an auction
An auction is different. The deposit amount is set in the auction terms and announced before the sale, and it is typically non-refundable once you sign, because there is no inspection or financing contingency in the contract. That is why auction buyers inspect and line up their money during the marketing period. The auction bidding guide walks through it.
If you are writing an offer and wondering what amount makes sense, ask. I will tell you what I am seeing on similar homes right now and what the seller is likely to expect. The amount is negotiable, and so are the deadlines that protect it. What happens to a deposit in a dispute is a question for your attorney.
Want to talk it through with a real person?
Text HOME to 316-364-7500 and I'll get you in to see it.
Related questions, answered straight
Is earnest money the same as a down payment?
No. Earnest money is a deposit you make when the seller accepts your offer, held by the title company while the deal moves toward closing. The down payment is the larger amount you bring to closing. At closing, the earnest money is credited toward what you owe, so it becomes part of your down payment and closing costs.
Can I lose my earnest money?
Yes, if you back out for a reason the contract does not cover, or you miss a deadline. If you cancel under a contingency you still hold, such as inspection or financing, within the time the contract allows, the deposit normally comes back to you. Read the deadlines carefully and ask your agent to track them.
Who holds the earnest money in Kansas?
Usually the title company that will handle the closing. It is held in an escrow account, not given to the seller. The title company releases it at closing as a credit to the buyer, or returns it or pays it out according to the contract and any signed release if the deal does not close.
Is earnest money different at an auction?
Yes. At auction the deposit is typically non-refundable once you sign, because the contract has no inspection or financing contingency. The amount is set in the auction terms and announced before the sale. Inspect and line up your money during the marketing period, before you bid.