Buying in Smyrna and wondering why you’re writing two different checks? You’re not alone. Many buyers mix up earnest money and a down payment, which can lead to timing mistakes or stress during escrow. In this guide, you’ll learn exactly what each payment does, when it’s due in Georgia, and when deposits are refundable so you can move forward with confidence. Let’s dive in.
Both payments help you buy a home, but they serve different purposes and occur at different stages.
| Earnest Money | Down Payment | |
|---|---|---|
| Purpose | Shows good faith and secures the contract while contingencies are reviewed | Funds part of the purchase price at closing and reduces the loan amount |
| When paid | Shortly after contract acceptance, per contract timeline | At closing, as part of your cash to close |
| Refundable? | Refundable only if you cancel under contract contingencies or by mutual agreement | Not a separate refundable deposit; paid only when you close |
| Typical GA practice | Named in the contract, held by an escrowee, credited to you at closing | Determined by your loan program and lender requirements |
Your purchase and sale agreement sets the earnest money amount, who holds it, when it must be deposited, and how it can be released. Georgia transactions often rely on standard contract forms from the Georgia Association of REALTORS that outline contingency periods and escrow instructions. These terms control whether your deposit is refundable.
In Cobb County, the escrow holder is often a closing attorney or title company. Sometimes a broker holds the deposit in a trust account subject to Georgia Real Estate Commission rules. Your contract will name the escrowee and specify how funds are handled.
Most Smyrna offers call for earnest money to be delivered 1 to 3 business days after the seller accepts your offer. Some contracts allow up to 5 business days. Funds are usually wired or delivered as certified funds, though policies vary by escrow holder. Confirm timing and acceptable payment methods before you submit your offer so there are no delays.
If you close, the escrow holder credits your earnest money toward your cash to close. If you terminate under a valid contingency and follow notice rules, your deposit is typically returned. If there is a dispute, the escrowee will not release funds without a written mutual release or court order.
You pay your down payment at closing. The amount depends on your loan program and lender requirements, and it directly reduces your loan amount.
Your earnest money is applied as a credit toward your down payment and closing costs on the closing statement.
Escrow holders follow the written instructions in your contract and do not release funds without joint authorization or a court order. If parties cannot agree, the escrowee may hold the funds until resolution or file an interpleader action. Brokers who hold trust funds must follow Georgia Real Estate Commission regulations.
Typical earnest money in the Atlanta metro, including Smyrna, often starts around 1 percent of the purchase price. In competitive situations, buyers sometimes offer 2 to 3 percent or a fixed amount like 5,000 to 10,000 dollars to strengthen an offer. Slower segments may see lower amounts. The right number depends on local conditions and your risk tolerance.
Closing costs for buyers often range from 2 to 5 percent of the price and can include lender fees, title services, transfer taxes, recording, and prepaids for taxes and insurance. Your lender will issue a Loan Estimate and Closing Disclosure that itemize these costs.
Smyrna’s market can shift by neighborhood and price point. In stronger seller markets, larger earnest money can help your offer stand out. For a quick sense of regional trends, review the Atlanta REALTORS Association market briefs, then tailor your strategy to the specific home you want.
Looking for a clear plan from offer to closing in Smyrna or anywhere in Cobb County? Let our family team guide your timelines, deposits, and negotiations so you can buy with confidence. Connect with the Carlson Orange Team to Talk to Your Real Estate Family.
