Do I have to submit earnest money when buying a home in downtown Chicago?
Short answer: No, you do not have to legally submit earnest money when buying a home in downtown Chicago (or anywhere in Illinois) to have a valid purchase contract. However, in practice, sellers and agents in Chicago nearly always expect earnest money with an offer, and offers without it are usually not competitive.
📌 Here’s how it works in Illinois (including Chicago)
🏡 Legal requirement:
- Illinois law and real estate contracts do not legally require a buyer to put down earnest money to form a binding contract. That means you could make an offer with no deposit, but you wouldn’t be obligated by law to pay it just to have a contract.
🤝 Market expectation:
- In practice in Chicago real estate deals (including downtown and Loop condos), sellers expect earnest money on offers as a sign of seriousness. Not providing it can make your offer look weak or uncompetitive, especially in multiple-offer situations.
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💰 Typical earnest money practice:
- Chances are your purchase contract will include an earnest money deposit, and the contract will spell out how much, where it’s held (usually by a title company or attorney’s escrow account), and when it’s due (often within 24–72 hours after contract ratification)
- Typical deposits in Chicago range from about 1 %–3 % of the purchase price, though amounts can be higher in competitive or luxury markets.
📆 At closing:
- Your earnest money is credited toward your purchase (down payment or closing costs), not an extra cost. If the deal falls apart under protected contingencies (inspection, financing, condo docs, etc.), it’s usually refundable per your contract terms.
⚠️ Risk if you back out:
- If you cancel after contingencies expire or without a contractually valid reason, the seller may keep your earnest money as damages.
🧠 Bottom line
- No legal requirement to submit earnest money in Illinois.
- Practically essential to be competitive especially in downtown Chicago.
- Typical practice: 1 %–3 % of purchase price delivered shortly after offer acceptance.
If you’re getting ready to make an offer and want help deciding how much earnest money will make your offer stand out in downtown Chicago, I can walk you through comps and strategy. Let’s tailor your offer to win.
Be sure to check out 10 Things Not To Do Before Buying a Home
Check out my "Buy Your Home" with Me Presentation.
Downtown Chicago Buyers Agent Expert, Kimberly Evetts
