New Construction Earnest Money in Kennesaw: What You Risk
Is Earnest Money Refundable on a New Construction Home in Kennesaw, GA?
Not always, and that is the biggest difference from buying a resale home. Builders in Kennesaw and Acworth typically require a deposit of 5 to 10 percent of the purchase price, paid in stages as the home is built, and that deposit is often non-refundable once you sign the builder's own purchase agreement. Georgia's standard due diligence period, the window resale buyers use to walk away for any reason, usually does not carry over to a builder's contract the same way. Reading the builder's contract before you sign, not after you have already put money down, is what actually protects you.
TL;DR
- Builder deposits in Kennesaw and Acworth typically run 5 to 10 percent of the purchase price, far higher than the modest $500 to $2,000 earnest money common on a resale contract.
- Georgia's standard due diligence period, the window that lets resale buyers cancel for any reason and keep their earnest money, usually does not apply to a builder's own purchase agreement.
- Builders typically collect the deposit in stages, at contract signing, at the start of construction, and sometimes again at drywall or cabinet selection, so your exposure grows as the build progresses.
- Backing out without a contract-based reason, such as an unmet financing contingency or a builder delay clause, is treated as buyer's remorse, and buyer's remorse is exactly the scenario builders keep the deposit for.
- Having an agent or real estate attorney review the builder's contract before you sign protects your deposit far more than reading it after you have already put money down.
New construction has become a real part of the conversation for buyers in Kennesaw and the broader West Cobb corridor, and almost every buyer I sit down with assumes a builder deposit works the same way resale earnest money does. It doesn't, and the gap between what buyers expect and what the builder's contract actually says is where deposits get lost.
Builder Deposits vs. Resale Earnest Money in Cobb County
On a standard resale purchase in Cobb County, the GAR contract splits your money into two pieces: a modest earnest money deposit, usually a few hundred to a couple thousand dollars, held in trust and generally refundable, and a separate due diligence fee, paid directly to the seller as consideration for your right to inspect and walk away during the due diligence period.
New construction skips that structure almost entirely. Builders write their own purchase agreements rather than using the standard GAR resale contract, and those agreements set their own deposit size and their own refund rules. In Kennesaw and Acworth, it's common for builders to ask for 5 to 10 percent of the purchase price. On a $450,000 new build, that's $22,500 to $45,000, often collected across two or three installments as the home moves from permit to framing to drywall.
Where the Deposit Actually Goes
A resale earnest money deposit in Georgia is typically held by a broker in a regulated trust account, with release governed by Georgia Real Estate Commission rules. A builder's deposit is a different animal. It's held according to whatever the builder's own contract says, sometimes in the builder's operating account rather than a third-party trust account. Before you sign, ask directly where the money sits and what has to happen for it to come back to you. Don't assume it works the way your last resale purchase did.
What Happens If You Walk Away From a Kennesaw New Construction Contract
Buyer's Remorse vs. a Contract-Based Exit
If you back out because you changed your mind, found a better deal elsewhere, or decided you're not ready to move, that's buyer's remorse. Builders are generally entitled to keep some or all of the deposit in that situation, since they pulled the lot off the market and started building specifically for you.
If you back out because a financing contingency wasn't met, the builder missed an agreed completion date, or the finished home doesn't match the approved plans and specifications, that's a contract-based exit. Whether you get the deposit back in that case depends entirely on the specific language in the builder's own contract, not on any statewide standard.
Why the Standard Due Diligence Period Often Doesn't Apply
Georgia's due diligence period is a feature of the standard GAR resale contract. It gives resale buyers a negotiated window, commonly seven to fourteen days, to inspect the property and walk away for any reason while keeping their earnest money. It's one of the most buyer-friendly parts of Georgia's resale process.
Builder purchase agreements are drafted by the builder's own legal team, not GAR, and most don't include an equivalent unconditional walk-away window. Some builders offer a short rescission period right after signing, but it isn't guaranteed across the industry, and you should confirm it in writing rather than assume it exists just because it's standard on a resale deal.
Protecting Your Deposit Before You Sign at the Sales Office
A few things to confirm before you hand over a check, not after:
- Ask what specifically triggers a refund versus a forfeiture, in writing, rather than relying on what the sales counselor tells you verbally.
- Map out the full deposit schedule so you know exactly how much is due at signing, at the start of construction, and at any later milestone, and what your total exposure looks like at each stage.
- Check for a financing contingency. Many builder contracts don't include one by default. If yours doesn't, ask whether one can be added, or make sure your rate lock and pre-approval timeline actually protect you through closing.
- Have the contract reviewed by a real estate agent or attorney before you sign. The sales counselor at the model home represents the builder, not you, and the contract is written accordingly.
- If you're relocating from out of state, build in extra review time before any deposit is due. Buyers moving from California, New York, or Florida often feel pressure to sign quickly on a visit, and that's exactly when a deposit clause gets missed.
New construction has become a meaningful share of available inventory in Marietta, Kennesaw, and Acworth as resale inventory has stayed tight, which means more buyers are running into this exact deposit question for the first time. The right deposit terms, and whether a financing contingency can even be added to a specific builder's contract, depend on the builder and the community. That's exactly the kind of review I walk buyers through before they put down a dollar, not after.
Frequently Asked Questions
Is earnest money refundable on a new construction home in Kennesaw, GA?
Sometimes, but not automatically. Refundability depends entirely on the specific language in the builder's own purchase agreement, not on Georgia's standard resale rules. If you walk away for a contract-based reason, such as an unmet financing contingency, you generally have a stronger case for a refund than if you just change your mind. For current new construction activity in Kennesaw, visit the community page.
How much deposit do builders typically require in Kennesaw and Acworth?
Most builders in this market ask for 5 to 10 percent of the purchase price, which is substantially more than the $500 to $2,000 earnest money typical on a resale contract. The deposit is usually collected in stages tied to construction milestones rather than as a single upfront payment.
Does Georgia's due diligence period apply to new construction contracts?
Generally not in the same way it applies to resale deals. The due diligence period is a feature of the standard GAR resale contract, and builder purchase agreements are drafted independently by the builder, so most don't include an equivalent unconditional walk-away window. Always confirm directly with the builder whether any rescission period exists, in writing.
What should I check in a builder's contract before I put down a deposit?
Confirm the full deposit schedule, what specifically triggers a refund versus a forfeiture, whether a financing contingency is included, and what happens if the builder misses the completion date. Having an agent or attorney review the contract before you sign catches far more than reviewing it after you've already put money down. You can read more buyer-side breakdowns like this on Path2Sold.com.
Can I negotiate the deposit amount or schedule with a builder?
It depends on the builder and how active the community is, but it's worth asking, especially on spec homes that are further along in construction or in communities with slower absorption. Builders in a strong selling position have less incentive to negotiate deposit terms, while builders sitting on finished inventory may have more flexibility.
Buying new construction in Kennesaw or Acworth puts real money at risk well before closing, and the protections you're used to from a resale contract largely don't apply. Schedule a consultation with me, Robert Masoudpour, Associate Broker in Atlanta, GA, and I'll walk through the builder's contract with you before you sign, not after. Schedule a 15-minute consultation
