Earnest money is a purchase-contract deposit, commonly held by an escrow holder, title company, broker, or attorney as the agreement directs. It is not automatically the seller’s money and is different from a mortgage down payment.
The contract should identify the amount, delivery deadline, holder, application at closing, conditions for refund or release, default consequences, and dispute process. Local law and professional rules can govern custody and disbursement.
Example: an inspection contingency may permit timely termination and return of the deposit, while a missed notice deadline may change the result. The signed agreement and documented notices control; a generic glossary rule cannot.
Records to preserve
Keep the executed agreement and amendments, delivery receipt, escrow confirmation, contingency notices, deadline calendar, release instructions, and final settlement statement. Never infer release authority from deal status alone.
When a dispute occurs
Do not move or promise the funds based on one party’s instruction when the escrow terms require joint direction, a court order, arbitration, or another process. Obtain advice from the closing professional or transaction counsel.
Editorial ownership
Written and maintained by the Aptoria editorial teamContent updated September 21, 2026. Editorial method reviewed July 28, 2026. Aptoria reviews scope, source fit, examples, limitations, links, and publication gates. This record does not claim attorney, CPA, lender, appraiser, or other independent professional sign-off.
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Due diligence period
A contract-defined period for investigating a property and exercising rights provided by the signed purchase agreement.
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Escrow
Money or documents held by a neutral third party until specific conditions of a deal are met.
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Appraisal
A licensed appraiser's independent estimate of a property's market value, usually ordered by the lender before a loan closes.
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