Earnest money is generally due within one to three business days after you and the seller both sign the purchase agreement, and the deposit typically runs 1% to 3% of the home’s purchase price. That short window is set by your contract, not by custom, so the exact deadline and dollar amount are whatever the signed agreement says. Miss the window and the seller can walk.
When the Deposit Clock Starts
The countdown begins at mutual acceptance, the moment both parties have signed the purchase agreement. From that signature, most contracts give the buyer one to three business days to deliver the earnest money to the escrow holder. In competitive markets, sellers sometimes shorten that to a single business day.
Your contract controls. Read the earnest money clause before you sign, not after, and ask your agent to confirm the exact due date in writing so there’s no confusion about which day counts as day one. Business days skip weekends and federal holidays, which can matter if you sign on a Friday afternoon.
Because the window is so tight, prepare the funds before you make the offer. Have the money already sitting in an account you can draw from quickly, know which title company or escrow agent will receive it, and confirm how they accept payment. Scrambling to move funds between accounts after acceptance is how buyers miss deadlines.
What Happens If You Miss the Deadline
A late deposit is a breach of contract. The seller can typically cancel the agreement and accept another offer, and in a market with backup buyers waiting, that’s often exactly what happens. Even when a seller doesn’t cancel outright, arriving late signals unreliability and hands the other side leverage to renegotiate terms or demand a larger deposit.
There is no automatic grace period. If your contract says three business days, day four is late.
How Much Earnest Money You’ll Need
Earnest money deposits usually fall between 1% and 3% of the purchase price, though the number is negotiable and driven mostly by local market conditions. On a $400,000 home, that range works out to roughly $4,000 to $12,000.
In a hot seller’s market with multiple offers on the same property, a larger deposit can make your bid more credible and help it stand out. When inventory is high and sellers are competing for buyers, you can often negotiate a smaller amount. Sellers want a deposit big enough that you won’t walk away casually; buyers want to risk as little as possible until inspections and financing clear.
Whatever number you land on, get it written into the purchase agreement clearly. Vague language about the deposit amount invites disputes later.
New Construction Is Different
Builders often ask for deposits as high as 10% of the purchase price. Some builder contracts also allow the builder to use those funds during construction rather than holding them untouched in a neutral escrow account. That’s a meaningful difference from a resale transaction: if the builder can spend your deposit and the project stalls, recovering the money becomes much harder. Read a builder’s contract carefully before signing, and pay particular attention to how and where your deposit is held.
How To Deliver the Funds
The purchase agreement or an earnest money addendum names the escrow agent, title company, or attorney who will hold the deposit. You’ll deliver payment either in person at the title company’s office or electronically. The common methods are cashier’s checks, personal checks, and wire transfers, with wires being the fastest and most common for larger amounts.
Keep every receipt and confirmation number. Once funds arrive, the escrow officer issues a formal receipt to both you and the seller, and that receipt is your proof you met the contractual deadline.
Verify Wire Instructions Before You Send Anything
Wire fraud aimed at real estate transactions is one of the fastest-growing scams in the country, and earnest money is a prime target. Criminals compromise email accounts belonging to agents, title companies, or lenders, then send buyers fake wiring instructions that route funds to a thief’s account. Once a wire lands in the wrong place, recovering it is extremely difficult and often impossible.
The single most important step is verifying wiring instructions by phone before you send any money. Call the title company or escrow agent using a number you already have or one you looked up independently. Do not use the phone number printed in the same email that contains the wiring instructions, because if that email is fraudulent, so is the number.
Be deeply suspicious of last-minute changes. Title companies don’t quietly switch account details by email the day before closing. If someone sends revised wire information at the eleventh hour, treat it as a red flag until you’ve confirmed it by phone. After you send the wire, call the recipient right away on your trusted number to verify they received it. That narrow window immediately after transfer is your best chance to catch a mistake and try to reverse it.
Where the Money Sits Until Closing
Your deposit goes into a trust or escrow account kept separate from the escrow company’s own business funds. The escrow agent holds it as a neutral third party, which means neither you nor the seller can touch it until the deal closes or the contract terminates. The money stays there through the entire due diligence period while you complete inspections, secure financing, and finalize the title search.
Whether the account earns interest depends on your agreement with the escrow holder, and any interest arrangement has to be agreed to in writing by all parties. On a deposit held for 30 to 60 days, the interest usually amounts to very little, but it’s worth asking about if the deposit is large or the closing is far out.
At closing, the deposit isn’t an extra cost. It’s applied as a credit toward your down payment and closing costs on the settlement statement, reducing what you bring to the table.
Getting It Back, or Losing It
Contingencies are the contract clauses that let you cancel and recover your earnest money if certain conditions aren’t met. The ones that matter most:
- An inspection contingency lets you walk away if a professional inspection reveals problems you’re unwilling to accept, as long as you notify the seller before the inspection deadline using the method the contract requires.
- An appraisal contingency protects you if the home appraises below the agreed price. You and the seller can try to renegotiate, and if you can’t agree, you get the deposit back. Waiving it in a competitive offer means absorbing the risk of overpaying relative to appraised value.1National Association of REALTORS®. Earnest Money in Real Estate: Refunds, Returns and Regulations
- A financing contingency protects your deposit if your mortgage falls through during underwriting or the property doesn’t meet lender standards. Without one, the seller can keep the earnest money if your loan collapses. Preapproval reduces the risk but doesn’t guarantee final approval.1National Association of REALTORS®. Earnest Money in Real Estate: Refunds, Returns and Regulations
- A title contingency lets you cancel and recover the deposit if the title search turns up liens, ownership disputes, or other legal claims that can’t be cleared before closing.
Every contingency has its own deadline. Once a deadline passes without you exercising the contingency in writing, your deposit is generally no longer protected against that particular issue. Missing an inspection or financing deadline by even a day can cost you the full deposit, which is why your agent should be tracking these dates as carefully as the closing date itself.
If you back out without a valid contingency in play, the seller can claim the earnest money as compensation for taking the home off the market. Most purchase agreements treat the deposit as liquidated damages, meaning the seller doesn’t have to prove specific losses to keep it. Cold feet after contingency deadlines have passed, a personal financial change that doesn’t trigger the financing contingency, or simply deciding you don’t want the house are all situations where buyers lose their money. The escrow agent will release funds based on the contract terms and signed instructions, so don’t count on the escrow company to advocate for you. They follow the paperwork.
When a deal does end under a valid contingency and both sides agree on the refund, buyers typically get their money back within one to ten business days after signing the release.