Earnest Money in Minnesota: How Much and When It's Due

Ever wonder how much earnest money you really need to put down in Saint Paul and when it is due? You are not alone. Many buyers and sellers hear different numbers and rules, which can be confusing during a fast-moving offer process. In this guide, you will learn typical earnest money amounts in Ramsey County, the timing most offers use, where your funds go, and when deposits are refundable or forfeited. Let’s dive in.

Earnest money basics in Minnesota

Earnest money is a buyer’s deposit that accompanies an offer and shows you are serious. If the sale closes, your deposit is credited toward your down payment or closing costs. In Minnesota, there is no statewide minimum or fixed percentage. The amount, timing, who holds the funds, and refund rules are set by your written purchase agreement.

Most Minnesota offers use the Minnesota Association of REALTORS standard forms, which include negotiable fields for the deposit amount, delivery deadline, escrow holder, and what happens if the deal cancels. Your purchase agreement controls, so make sure every detail is spelled out in writing.

How much earnest money in Saint Paul

In the Twin Cities, including Saint Paul, buyers commonly offer earnest money within a practical range rather than a strict rule. Typical patterns include:

• Modest or lower-priced homes: often $1,000 to $3,000.
• Mid-range homes: often $2,000 to $10,000.
• As a guideline, many agents use about 1% to 3% of the purchase price in active markets.

The right amount for you depends on price point and competition. In multiple-offer situations, buyers often increase the deposit and tighten timelines to stand out. In less competitive conditions, smaller deposits are common.

When to consider a larger deposit

• You are in a competitive, multiple-offer situation.
• The home is at a higher price point or newly built.
• You want to signal strength alongside a shorter inspection or financing timeline.
• You are a cash or near-cash buyer and want a cleaner, stronger offer.

When a smaller deposit can work

• The market is slower and contingencies are common.
• You need more funds available for inspections or appraisal fees.
• The seller prefers other terms, and a smaller deposit still meets their comfort level.

Quick Saint Paul examples

• $300,000 home: 1% is $3,000, 2% is $6,000.
• $450,000 home: 1% is $4,500, 2% is $9,000.
• $600,000 home: 1% is $6,000, 2% is $12,000.

These numbers help you translate percentages into dollars so you can plan your cash on hand before you write an offer.

When earnest money is due

Your purchase agreement sets the delivery deadline. In Minnesota, it is common to see delivery due within a set number of business days after acceptance, but the exact number is negotiable. Confirm the specific deadline written into your offer so you can meet it.

Missing the deposit deadline can be a breach, so plan your wire or check delivery before you submit the offer. Ask for written confirmation when your deposit is received.

Where your deposit is held

The purchase agreement names the escrow holder. In Saint Paul and across the Twin Cities, buyers often deposit earnest money with the title or escrow company. Some contracts name the listing broker’s or buyer’s broker’s trust account instead. Title companies and brokers must follow strict trust account rules for client funds.

Common payment methods include a wire transfer, cashier’s check, or certified check for clear traceability. Personal checks are sometimes accepted if there is time to clear. Keep your receipt or wire confirmation in your records.

How your earnest money is applied

If the sale closes, your earnest money is usually credited toward your down payment and closing costs. If the transaction cancels under a contingency or other contract right, the escrow holder follows the release instructions in the agreement to return funds as appropriate.

When earnest money is refundable

Refunds are generally tied to contingencies in your signed purchase agreement. If you act within the deadlines and follow the contract steps, you can usually receive your deposit back when you cancel under a covered reason. Common contingencies include:

• Inspection: You cancel within the inspection period under the contract terms.
• Financing: You cannot obtain financing despite good faith efforts and give timely notice.
• Appraisal: The appraisal comes in low and you end the deal under the contract.
• Title: A title issue cannot be cleared within the allowed time.

Read the timelines closely and track your dates. Proper, timely notice is key to preserving refund rights.

When earnest money can be forfeited

Earnest money is at risk when a buyer defaults after contingency protection ends. Common examples include:

• You back out after inspection, financing, or appraisal contingencies have been waived or have expired without another valid exit under the contract.
• You fail to deliver the deposit by the written deadline and do not cure quickly as allowed by the seller.

Some purchase agreements include a liquidated damages clause that allows the seller to keep the earnest money as full damages if the buyer defaults, subject to the clause and facts. Whether that applies to your situation depends on the exact contract language.

Saint Paul scenarios to make it real

• Scenario A — Typical protected buyer: You offer $350,000 with $5,000 earnest money, a 10-day inspection, and a 30-day financing contingency. You cancel within the inspection window due to findings. Your earnest money is refunded per the contract.
• Scenario B — Competitive offer: You offer $350,000 with $15,000 earnest money and a shortened inspection period to strengthen your bid. If you later cancel after contingencies end without a protected reason, the seller may be entitled to keep the deposit.
• Scenario C — Missed deadline: Your offer is accepted but you miss the deposit delivery date. The seller may treat this as a breach and pursue remedies, though many parties cure quickly to keep the deal moving.

Buyer checklist for Ramsey County offers

• Confirm your earnest money amount and funding source before you write.
• Name the escrow holder in the offer. A title company escrow is common.
• Set a realistic delivery deadline and plan your wire or cashier’s check.
• Track every contingency deadline that affects refund rights.
• If you shorten inspection or financing windows to compete, weigh the higher risk to your deposit.
• Get written confirmation when the escrow receives your funds and where they are held.
• Keep copies of all deposit-related communications and receipts.

Seller tips on earnest money

• Verify the deposit is delivered by the deadline and held by the named escrow.
• Note how deposit funds will be credited at closing.
• If you plan to rely on the earnest money as a remedy for buyer default, follow the notice and cure steps in the contract.
• If a dispute arises, use the release and disbursement procedures in the agreement to avoid delays.

Avoiding and handling disputes

Most purchase agreements require mutual written instructions for an escrow release. If the buyer and seller disagree, the escrow holder will not release funds without both parties’ signed instructions or a court order or arbitration award. Some standard forms include an escrow dispute clause that directs the escrow holder to an interpleader or another resolution process when there is an impasse.

Clear communication, documented notices, and staying within the contract timelines are your best tools to prevent disputes in the first place.

Local market context: what affects size in Saint Paul

Deposit size in Saint Paul often reflects price tier and competition. Higher-priced homes and multiple-offer situations tend to draw larger earnest deposits. In steady or slower conditions, you may be able to keep the deposit lower and still get your offer accepted. Your agent can help you read the current neighborhood-level demand and set a number that balances strength with risk.

Putting it all together

Earnest money in Minnesota is flexible and fully negotiable, but it is also meaningful. In Saint Paul and Ramsey County, plan for a practical range that often lands between a few thousand dollars and about 1% to 3% of the price, then adjust for competition and comfort. Lock in the delivery deadline, choose a reliable escrow holder, and track your contingency dates so your deposit stays protected.

If you want help right-sizing your deposit and structuring a strong, protected offer, reach out to Kary Marpe. Let’s connect. Call or email today.

FAQs

How much earnest money do Saint Paul buyers usually put down?

• Many offers fall between a few thousand dollars and about 1% to 3% of the price, adjusted for competition and price tier.

When is earnest money due after my offer is accepted in Minnesota?

• The purchase agreement sets the deadline, commonly within a set number of business days after acceptance.

Who holds earnest money in Ramsey County transactions?

• Deposits are typically held by a title or escrow company, or by a broker’s trust account as named in the purchase agreement.

Is my earnest money refundable if I cancel after inspection in Saint Paul?

• If you cancel within the inspection period under the contract, the deposit is usually refundable per the agreement.

What happens to my earnest money if the appraisal is low?

• If you have an appraisal contingency and cancel under that clause, your deposit is typically returned according to the contract.

Can I lose my earnest money if I back out of a Saint Paul purchase?

• Yes, if you default after contingency protection ends or miss key deadlines without cure, the seller may be entitled to keep the deposit.

How is earnest money applied at closing in Minnesota?

• Your deposit is usually credited toward your down payment and closing costs at settlement.

What if the buyer and seller disagree about releasing earnest money?

• Without mutual written instructions, the escrow holder usually needs a court order or arbitration award, or follows the dispute clause in the contract.