Utah Earnest Money Rules Explained for Riverton Buyers

Buying in Riverton and wondering how earnest money works in Utah? You are not alone. For many first-time buyers, the deposit piece feels confusing, and the stakes feel high when you are trying to win a home. In a few minutes, you will know how much to expect, when to pay it, what protects your deposit, and how to handle it securely in a Salt Lake County transaction. Let’s dive in.

Earnest money basics

What it is

Earnest money is a good-faith deposit you provide with your accepted offer to show you plan to close. It reassures the seller during the time their home is off the market. If you close, the deposit is credited to your cash to close, such as your down payment or closing costs.

Where funds are held

Your deposit is held in escrow, which is a neutral account. In Utah, the escrow holder is commonly a title company, a closing company’s escrow department, or the listing broker’s trust account. Ask for written confirmation of who is holding your funds and request a receipt for your records.

How it applies at closing

When the sale closes, the escrow holder releases your earnest money to the settlement statement. It will reduce what you owe at the table. If your contract ends in a permitted way, the deposit may be returned according to the contract’s terms.

Typical amounts in Riverton

How much to offer

In many Utah transactions, earnest money often falls in the 1 percent to 3 percent range of the purchase price. Exact numbers depend on price and competition. As simple examples:

• On a $400,000 home, 1 percent is $4,000 and 2 percent is $8,000.
• On a $600,000 home, 1 percent is $6,000 and 2 percent is $12,000.

In lower competition, some buyers offer $1,000 to $3,000 or about 0.5 percent to 1 percent. In higher competition, buyers sometimes increase the deposit or adjust contingencies to strengthen their offer. The right amount is a strategy decision that should match your price point and comfort level.

Local market context

Salt Lake County, including Riverton, has seen periods of strong demand. That often nudges deposits toward the 1 percent to 3 percent range for competitive offers. Because conditions change, ask your agent to compare recent accepted offers so you size the deposit to the current market, not last season’s rules of thumb.

Timelines and delivery in Utah

When you pay

Your purchase contract sets the deadline for delivering earnest money after your offer is accepted. In practice, delivery is often required immediately or within 1 to 3 business days, but the only rule that matters is the one in your signed contract. Choose a timeline that fits how you will move the funds, including any bank transfer limits.

Accepted payment forms

Deposits are typically paid by personal check, certified cashier’s check, or wire transfer. Some sellers prefer wires for speed, but you must handle wiring instructions with care to avoid fraud. If you are unsure, ask the escrow holder for their process before you send funds.

What happens at closing

If you close, the deposit is credited to your side of the settlement. If the contract is canceled in a way the contract allows, the deposit is handled per the cancellation terms. If you cancel for a reason that is not protected, the seller may have remedies that include a claim to the deposit.

Refundability and contingencies

Your contract’s contingencies and deadlines control if your earnest money is refundable. Common protections include:

• Inspection contingency. You usually have a set number of days, often about 7 to 14 in practice, to inspect and either negotiate repairs or cancel. If you cancel within the contingency period, your deposit is generally refundable.
• Financing contingency. If you cannot obtain the agreed loan within the time allowed and you have this contingency, you can usually cancel and receive a refund. If you remove this contingency and the loan falls through, refundability can be at risk.
• Appraisal contingency. If the appraisal is below the contract price and you follow the contract rules to cancel, your deposit is typically refundable unless the parties agree on another solution.
• Title or survey issues. If title review or a survey reveals issues that are not resolved within the contract timeline, you may have the right to terminate and receive your deposit back, subject to the contract.
• Sale-of-home contingency. If your purchase depends on selling your current home and that sale does not occur as required by the contract, you can usually cancel and receive a refund if the contract allows it.

If a buyer cancels for a reason that is not protected by the contract, the seller may keep the earnest money as liquidated damages or pursue other remedies, depending on the contract language. When there is a disagreement over who should receive the deposit, the escrow holder will typically hold the funds until both parties agree or there is a legal resolution.

Real-world scenarios

• Scenario A, refundable deposit. You deposit $8,000. During the inspection period, a major structural issue is found. You cancel within the deadline using the inspection contingency. Your deposit is refunded.
• Scenario B, forfeiture risk. You waive the inspection contingency to strengthen your offer, then change your mind without a contract reason. The seller may claim the deposit as damages under the contract’s remedies.
• Scenario C, disputed deposit. The inspection reveals issues. You and the seller cannot agree on repairs or credits. The escrow holder keeps the deposit in the account while the parties negotiate or use mediation, arbitration, or the courts.

Smart steps for first-time buyers

Before you write an offer

• Get a written mortgage preapproval, not just a prequalification.
• Discuss deposit strategy with your agent using recent Riverton comparisons and current competition.
• Decide which contingencies you need. Keep protections like inspection, financing, and appraisal if flexibility is important to you.

When you submit the offer

• State the deposit amount and the delivery deadline in the offer.
• Name the escrow holder and confirm their contact information.
• Keep a copy of your deposit receipt or confirmation.

If you need flexibility

• Consider a smaller deposit with stronger contingencies if you want more room to pivot. Balance this against the competitiveness of the home.
• Have a written plan with your agent for how to respond if a seller requests a larger deposit or fewer protections.

Handling funds securely

Wire fraud is a real risk in real estate. Protect your deposit with these steps:

• Verify wiring instructions by phone using a trusted, independently confirmed number. Do not rely on phone numbers in emails that provide wiring details.
• Confirm the escrow company’s legal name and account details in writing.
• Never send funds to a person or personal account. Only send to the escrow holder named in the contract.
• If anything looks off, pause and call the escrow holder and your agent before you send money.

If a dispute happens

If there is a dispute about the deposit, the escrow holder will generally keep the funds in the account until there is a mutual release or a legal directive. Many contracts call for mediation or arbitration. Some disputes can take weeks or months to resolve, so keep your documentation and timelines organized.

Bottom line for Riverton buyers

Earnest money is a normal and important part of buying in Utah. In Riverton and across Salt Lake County, many competitive offers use deposits in the 1 percent to 3 percent range, and refundability depends on your contract’s contingencies and deadlines. Protect yourself by sizing the deposit to the market, keeping the right protections, and following the contract’s timeline.

If you want a clear plan for your deposit and a competitive offer strategy, we are here to help. Connect with Tyson Leavitt Real Estate to map out your next steps with a local, detail-driven team.

FAQs

What is earnest money in a Utah home purchase?

• It is a good-faith deposit held in escrow that shows you intend to complete the purchase and is usually credited to your closing costs or down payment at settlement.

How much earnest money do Riverton buyers usually put down?

• Many offers use about 1 percent to 3 percent of the price, though lower deposits are sometimes used in less competitive situations and higher deposits in multiple-offer scenarios.

When is earnest money refundable in Utah contracts?

• Refundability depends on your contingencies and deadlines, such as inspection, financing, appraisal, and title, and on following the contract’s cancellation steps.

Who holds the earnest money in Salt Lake County?

• A neutral escrow holder, often a title company, a closing company’s escrow department, or a broker’s trust account, as named in your contract.

How quickly do I need to deliver earnest money after acceptance?

• Your contract sets the deadline, which often falls immediately or within 1 to 3 business days in practice, so plan ahead for checks or wires.

What happens if there is a dispute about my deposit?

• The escrow holder usually keeps the funds until both parties agree or a legal decision is made, and mediation or arbitration may be required by the contract.