Earnest Money Explained For Mt. Pleasant Buyers

Buying in Mount Pleasant and hearing different numbers for deposits, fees, and timelines? You are not alone. South Carolina uses both earnest money and a separate due diligence fee, and understanding how each works can help you protect your budget and your offer. In this guide, you will learn what each payment does, typical amounts in Mount Pleasant, key deadlines, refund rules, and a simple checklist to stay on track. Let’s dive in.

What earnest money means for you

Earnest money is a good-faith deposit you put down when your offer is accepted. It shows the seller you are serious and keeps you engaged in the process. If you close, your earnest money is credited to your down payment or closing costs.

In South Carolina, the funds are usually held in a trust or escrow account by the listing broker, a closing attorney, or another escrow holder named in the contract. You should receive written confirmation that shows the amount, deposit date, and who holds the funds. At closing, the escrow holder applies the deposit to your costs. If the sale does not close, the contract will decide if the money is returned or forfeited.

For a plain-language overview of how earnest money works, you can review Investopedia’s explanation of earnest money basics and NAR’s guidance on contingencies and buyer protections.

South Carolina twist: due diligence fee vs. earnest money

South Carolina commonly uses two separate payments in a residential purchase:

• Due diligence fee: Paid directly to the seller for your negotiated Due Diligence Period. It buys you the right to terminate for any reason during that period. It is usually nonrefundable.
• Earnest money: Held in escrow and may be refundable if you cancel within your contract’s rules, like during due diligence or under financing or appraisal contingencies.

The difference matters. The due diligence fee compensates the seller for taking the home off the market while you investigate. Earnest money is a separate escrowed deposit that can come back to you if you act within the contract’s deadlines and procedures.

For contract structure and standard forms used in South Carolina, consult the South Carolina Association of REALTORS at SC REALTORS. Your closing attorney can also explain how local escrow rules apply to your deal.

How much to put down in Mount Pleasant

Typical ranges vary with price point and competition, but you will commonly see:

• Earnest money: Often $1,000 to $5,000 for many single-family homes, or roughly about 1% of the purchase price as a starting guide. Higher-priced or highly competitive listings may see 2% or more.
• Due diligence fee: Highly variable. In the Charleston area, it can range from $500 to $10,000+, and for hot Mount Pleasant properties, buyers sometimes offer $5,000 to $20,000 or higher.

Mount Pleasant’s coastal appeal and demand can push amounts toward the high end. The right number for you depends on the home, days on market, and competing offers. Your agent can gauge current local norms before you write.

Deadlines and documentation to track

Every contract spells out key dates. Common timelines in South Carolina include:

• Due Diligence Period: Often 7 to 14 days, though it can be shorter in competitive situations or longer if you need more time for inspections and research.
• Earnest money delivery: Typically due within 1 to 5 business days after ratification. Many contracts use 3 business days. Missing this deadline can put you in default.
• Financing, appraisal, and insurance dates: These are separate from due diligence and must be tracked closely so your earnest money remains protected.

Lenders will need proof of your earnest money deposit and may require that the funds come from an acceptable source. Bankrate’s guide on how earnest money is applied at closing offers a helpful overview for budgeting.

When you can get earnest money back

Your contract controls refunds, so read it carefully and act on time. Common outcomes include:

• You terminate during due diligence: You can usually cancel for any reason within the Due Diligence Period, following the contract’s process in writing by the deadline. You typically forfeit the due diligence fee, and your earnest money is often returned.
• Financing or appraisal falls through: If you have these contingencies and you act before the deadlines, your earnest money is typically returned.
• The seller cannot deliver title or refuses to close: You are generally entitled to your earnest money back and may have other remedies under the contract.
• You cancel after due diligence without a valid contingency or miss a deadline: The seller may be entitled to keep your earnest money and could pursue other remedies if allowed by the contract.

Always send notices in writing before the deadline listed. Keep proof of delivery in case there is a dispute.

Step-by-step checklist for Mount Pleasant buyers

Before you sign

• Confirm in writing who will hold your earnest money and where the trust account is located.
• Set and understand your earnest money amount, delivery deadline, Due Diligence Period length, and due diligence fee amount.
• Read the remedies or liquidated damages clause so you know what happens to earnest money if you default.

Right after ratification

• Deliver earnest money by the method in your contract and get a written receipt immediately.
• Send your lender proof of deposit so underwriting can proceed.

During due diligence

• Complete inspections, review HOA documents, order surveys, and confirm insurance and financing.
• If you need to terminate, do it in writing before the deadline and follow the contract steps exactly.

If problems arise

• Loop in your agent and closing attorney right away and keep all documentation.
• If there is a dispute over release of funds, follow your contract’s escrow release and dispute resolution process.

At closing

• Check your settlement statement to confirm your earnest money was credited correctly.

For a broad refresher on earnest money across markets, see Rocket Mortgage’s consumer explainer on how earnest money works.

Offer strategies in a competitive Mount Pleasant market

If you want to signal strength without taking on unnecessary risk, consider these approaches:

• Calibrate deposit sizes: A larger earnest money deposit can help your offer stand out, and a competitive due diligence fee can do the same. Balance both with your risk tolerance and timeline.
• Right-size the Due Diligence Period: Shorter periods are attractive to sellers, but only if you can complete inspections and decisions on time. Coordinate with your inspector and lender before you commit.
• Track deadlines in writing: Put a master calendar in place for due diligence, financing, appraisal, and earnest money delivery dates. Share it with your agent and lender.
• Keep documentation tight: Save your escrow receipt, emails, inspection reports, and all notices. Clear records resolve most earnest money questions fast.

The goal is to write an offer that is both competitive and protected by realistic deadlines and contingencies.

Final thoughts

Understanding how the due diligence fee and earnest money work in South Carolina will help you budget, protect your funds, and write stronger offers in Mount Pleasant. Focus on setting clear timelines, delivering deposits on time, keeping written proof, and using your contingencies wisely. A small amount of preparation now can prevent bigger headaches later.

If you want a local, step-by-step plan for your next Mount Pleasant offer, reach out to schedule a quick consult with Roslyn Kay Parker. We will walk you through the numbers, the timelines, and the documents so you can move forward with confidence.

FAQs

In South Carolina, what is the difference between earnest money and the due diligence fee?

• Earnest money is an escrowed deposit that may be refundable if you cancel within contract rules; the due diligence fee is paid to the seller for your right to terminate during the Due Diligence Period and is usually nonrefundable.

How much earnest money is typical for Mount Pleasant homes?

• Many buyers use $1,000 to $5,000 or about 1% of the purchase price, with higher deposits for premium or competitive listings.

When is earnest money due after my offer is accepted?

• Contracts often require delivery within 1 to 5 business days after ratification, and many use 3 business days, so plan your transfer early.

Can I get my earnest money back if financing or appraisal fails?

• Yes, if your contract includes those contingencies and you act before the deadlines with proper written notice, the earnest money is typically returned.

What happens to the due diligence fee if I terminate during the Due Diligence Period?

• You usually forfeit the due diligence fee, but your earnest money is commonly returned if you follow the contract’s termination steps on time.

Who holds my earnest money in South Carolina?

• The listing broker or a closing attorney often holds the funds in a trust account named in the contract, and you should receive a written receipt confirming the deposit.