Earnest Money In Illinois: A Cary Buyer’s Guide

Making an offer on a Cary home? You will hear about earnest money right away. It can feel confusing if you are a first-time or relocating buyer, but it is a simple idea with clear rules. By understanding how earnest money works in Illinois, you can write a stronger offer and protect your deposit from start to finish. Here is what you need to know for Cary and the northwest suburbs. Let’s dive in.

What earnest money is

Earnest money is a good-faith deposit you put down with your offer to show the seller you are serious. It is not a fee. If you close, it is usually applied to your down payment and closing costs. If the deal ends under a protected contingency, the deposit is typically refundable per your contract.

Your purchase contract controls what happens to the money. Contingencies, deadlines, and default language in that contract determine whether the seller may keep the deposit if things go sideways.

Typical amounts in Cary

Local norms in Cary and nearby suburbs vary by price point and competition:

• Entry-level offers: often 1,000 to 2,500 dollars.
• Mid-price homes: commonly 1 to 2 percent of the purchase price.
• Higher-priced or competitive offers: 2 to 3 percent or a larger flat amount.

In multiple-offer situations, some buyers raise the deposit to stand out. Be careful with any “nonrefundable” terms. Those remove protections you would otherwise have under contingencies.

When you pay and deadlines

Timing is set by your contract. Here is what is common in suburban Illinois:

• You may submit a small amount with the offer, then deliver the full deposit after acceptance.
• Contracts often require delivery within 24 to 72 hours or up to 3 to 5 business days after acceptance.
• Some contracts split it into an initial deposit at signing and a second deposit shortly after.

Always confirm the exact deadline in your signed contract. Missing it can be a default.

Who holds your deposit in Illinois

Earnest money is usually held in escrow until closing or until both parties agree in writing to release it. In Illinois, one of the following typically holds the funds:

• Title company or settlement agent. Very common. They hold the deposit, provide receipts, and disburse at closing per written instructions.
• Attorney escrow. Used when one or both sides prefer attorney involvement.
• Real estate broker trust account. Allowed under Illinois rules and managed under specific trust-account laws.

Protect yourself by getting a written receipt that shows who is holding the funds, the amount, and the date received. Keep wire confirmations or copies of cleared checks and note the escrow contact information.

When earnest money is refundable

Refundability depends on the exact language in your signed contract and whether you meet all notice and timing rules. The most common protections are below.

Inspection period

Most Illinois contracts include an inspection window so you can order home, radon, pest, or other inspections. If the contract gives you the right to cancel within that window and you do so properly before the deadline, the deposit is typically refundable. Inspection periods often run 5 to 10 business days, though this is negotiated.

Attorney review

Some contracts include an attorney-review clause. During that short window, your attorney can approve or disapprove the contract. If the attorney disapproves and you cancel within the allowed time, the deposit is generally refundable. Typical timeframes range from 2 to 5 business days, but the contract controls.

Financing and appraisal

If your contract is contingent on obtaining financing and you make a good-faith effort but cannot secure loan approval by the deadline, you can usually cancel and receive a refund if you send notice on time. If the property does not appraise at the contract price and your contract includes an appraisal contingency, you can often renegotiate or cancel and recover the deposit if you act before the deadline.

Seller issues or clear title

If the seller cannot deliver clear title or otherwise breaches the contract in a material way, you can typically terminate per the contract and receive a refund.

If you default or miss deadlines

If you miss deadlines, walk away without a valid contingency, or otherwise default, the seller may be entitled to keep the deposit under a liquidated-damages clause. This is why you should track all dates and consult your agent or attorney before you cancel.

How to protect your deposit

You can reduce risk by planning your earnest-money strategy and following the contract precisely.

Before you write an offer

• Decide your deposit amount. In many Cary-area sales, 1 to 2 percent is a common starting point. Adjust for price and competitiveness.
• Choose your contingencies. Inspection, financing, appraisal, clear-title, and whether to include attorney review.
• Ask about escrow holder. Many sellers name a title company. You can request a reputable local title company if you prefer.

When you submit your offer

• Be ready with proof of funds or an initial check to show credibility.
• Specify the escrow holder and delivery method, including wiring details if needed.
• Set clear deadlines for earnest money delivery and each contingency period.

During inspections

• Schedule inspections immediately after acceptance.
• If you plan to request repairs, do it in writing within the inspection window.
• If you choose to cancel under the inspection contingency, send written notice exactly as the contract requires and keep proof of delivery.

If financing or appraisal issues arise

• Stay in close contact with your lender.
• Send contract notices promptly if approval looks unlikely or the appraisal comes in low.
• Keep documentation that shows your good-faith effort to obtain financing.

Before closing day

• Confirm with the escrow holder how your deposit will be applied at closing.
• Obtain a final accounting and keep all receipts and wire confirmations.

Local tips for Cary buyers

• Market conditions matter. In low-inventory or multiple-offer settings, sellers may expect higher deposits or tighter timelines.
• Title company practices are consistent across McHenry County. National and regional title companies serve Cary. You can usually use the seller’s preferred title company or request your own.
• Closing timing can be affected by recording schedules. Coordinate with your title company so there are no surprises.

The bottom line

Earnest money shows a Cary seller you are serious and gives you a stake in the purchase. It is usually credited to you at closing. Your contract defines the rules, so protect your deposit by meeting deadlines, following notice procedures, and using contingencies wisely. With the right plan, you can write a competitive offer while keeping your funds safe.

If you want local guidance on deposit strategy, contingencies, and timing in Cary, the Alice Picchi Team is here to help you buy with confidence. Reach out to the Alice Picchi Team to talk through your goals and next steps.

FAQs

What is earnest money in an Illinois home purchase?

• Earnest money is a good-faith deposit you pay with your offer that is applied to your down payment and closing costs if you close, and it is handled under your contract’s terms.

How much earnest money is typical in Cary, IL?

• Common ranges are 1,000 to 2,500 dollars for entry-level offers and about 1 to 2 percent of the price for many homes, with 2 to 3 percent in higher-price or competitive situations.

Who holds earnest money in Illinois transactions?

• A title company, an attorney, or a brokerage trust account typically holds the funds in escrow until closing or written release.

When can I get my earnest money back in Illinois?

• If you cancel within a valid contract contingency period, such as inspection, attorney review, financing, appraisal, or due to seller breach or title problems, the deposit is commonly refundable.

What happens if there is a dispute over releasing the deposit?

• The escrow holder will usually keep the funds until both parties sign a written release or a contract dispute process or court order directs disbursement.