To put money in escrow for a home purchase, you send your earnest money deposit to the escrow or title company named in your purchase agreement, using the wiring instructions or payee name they provide, before the deadline in your contract. The deposit is typically 1% to 3% of the purchase price, and the two accepted payment methods are a wire transfer or a cashier’s check. The details below cover exactly what to send, where to send it, and how to avoid the mistakes that push closings off track.
How Much to Deposit and When It’s Due
Earnest money shows the seller you’re serious. The amount is written into your purchase agreement and usually falls between 1% and 3% of the sale price. On a $400,000 home, that’s $4,000 to $12,000. Competitive markets sometimes push the figure higher.
The same agreement sets your deposit deadline, often one to three business days after mutual acceptance. Missing that window can give the seller grounds to cancel the contract, so read the deposit clause before you do anything else. Plan the method around the clearance time, not the other way around.
At closing, your deposit is credited toward your down payment or closing costs. Until then, it sits in a trust account that neither you nor the seller can touch.
Get the Escrow Instructions First
Once the purchase agreement is signed, the escrow or title company issues a document called the escrow instructions. This is the single most important piece of paper for moving your money correctly. It contains three things you need:
- The escrow file number, which is your transaction’s unique identifier.
- The exact legal name of the escrow or title company that must appear as payee.
- The receiving bank’s name, its nine-digit ABA routing number, and the escrow trust account number, if you’re wiring.
Every payment must carry the escrow file number. The escrow company processes many deposits a day and uses that number to match your funds to your file. A wire that arrives without it can sit unassigned long enough to blow your deadline.
Sending a Wire Transfer
A wire transfer sends funds electronically from your bank to the escrow company’s trust account. You’ll fill out a wire form at your bank with the receiving bank’s legal name, the ABA routing number, and the escrow trust account number from your instructions. The beneficiary must be the escrow company itself, not any individual. Domestic wire fees typically run $25 to $50.
Put the escrow file number in the memo or reference field. If your bank’s online wire form has no memo field, call the branch and ask how to attach a reference before you submit.
Timing matters. The Fedwire system that processes domestic wires operates until 7:00 PM Eastern Time on business days, but banks set their own internal cutoffs several hours earlier, commonly between 2:00 PM and 4:00 PM local time. Miss the cutoff and your wire waits until the next business day.1Federal Reserve Financial Services. Wholesale Services Operating Hours and FedPayments If your deadline is tomorrow, wire this morning.
Sending a Cashier’s Check
A cashier’s check is drawn against the bank’s own funds, which makes it a guaranteed form of payment. Bank fees typically run $5 to $15, and the bank will verify you have sufficient funds before issuing it.
The “Pay to the Order of” line must match the exact legal name of the escrow or title company in your instructions. A minor discrepancy, like abbreviating “Company” to “Co.,” can create problems at deposit. Write the escrow file number on the memo line.
Deliver in person when you can. If you have to mail it, use overnight or tracked delivery. A lost cashier’s check can take weeks to replace, and that clock runs against your contractual deadline. After the escrow company receives the check, it may still take one to two business days to clear their bank.
Verify Before You Send
Wire fraud targeting real estate transactions is one of the fastest-growing financial crimes in the country. The typical scheme: a criminal hacks into the email of a real estate agent, title officer, or buyer, then sends fake wiring instructions that redirect your funds to an account the criminal controls. Once the money leaves your bank, recovering it is extremely difficult.
The defense is one phone call. Before you wire anything, call your escrow officer directly to confirm the wiring instructions, using a number you already have on file or one from the title company’s website. Never call a number provided in the email that contains the wiring instructions, because the whole email may be fraudulent. If the instructions change at any point during the transaction, treat that as a red flag and verify again by phone.
Some title companies offer secure digital payment platforms that send you an encrypted link to submit payment directly from your bank account. These bypass email-based instructions entirely. If yours offers one, use it.
Confirm the Deposit Landed
After you send the payment, get a wire confirmation number or a receipt from your bank and forward it to your escrow officer the same day. The escrow company will issue its own confirmation once the funds are reconciled to your file. Keep both documents. They’re your proof you met the deposit deadline if any dispute comes up later.
If you don’t get a confirmation from the escrow company within a day of sending a wire, call. Unmatched deposits sitting in a trust account with no file number attached happen more often than they should.
What Happens If the Deal Falls Apart
Your purchase agreement governs what happens to the deposit if the transaction doesn’t close. Most contracts include contingencies that protect buyers. The common ones cover financing, home inspections, and appraisals. If your mortgage falls through and you have a financing contingency, you get the money back. If the inspection reveals major structural problems and you’re still within your inspection window, the same applies. Without those contingencies, walking away can cost you the deposit.
When both sides agree, they sign mutual cancellation instructions telling the escrow company how to distribute the funds. That’s the fastest resolution. When they disagree, the escrow agent generally files an interpleader action, depositing the disputed funds with a court and asking a judge to decide who gets the money.2Legal Information Institute. Federal Rules of Civil Procedure Rule 22 – Interpleader That process takes time and legal fees, which is why negotiating a resolution is usually the better path.
To protect yourself, keep copies of everything: the purchase agreement, escrow instructions, inspection reports, appraisal, loan denial letter if there is one, and any written communication with the seller or their agent. Contingencies only protect you if you can show you exercised them in writing and within the deadlines the contract sets.