Earnest money typically needs to be deposited within one to three business days after the seller accepts your offer and the purchase agreement becomes effective. The exact deadline is whatever your contract says it is, so the question of when does earnest money need to be deposited is answered first by reading the deposit clause, not by relying on local custom.
How the Deadline Is Counted
Most residential purchase agreements start the clock on the effective date, which is usually the moment the last party signs and that acceptance is communicated to the other side. From there, you generally have one to three business days to get the funds into escrow.
Business days and calendar days are not the same thing, and the difference can swing your deadline by several days. If your contract says “three business days” and you sign on a Friday, weekends and federal holidays don’t count, so the deadline may not arrive until the following Wednesday. If the contract says calendar days, that same Friday signing could put you on the hook by Monday.
Some contracts also distinguish between verbal agreement and delivery of a fully signed document. If signatures happen over several days, the clock may not start until the final executed copy is delivered. Read the deposit clause closely before signing. A 24-hour deadline is enforceable even in an area where three days is customary.
When the Contract Doesn’t Set a Deadline
If your agreement is silent on timing, state law or local real estate board rules may supply a default, often around three business days for transferring funds into escrow. Treat these defaults as a safety net rather than a plan. Have your agent confirm the exact deadline in writing before you sign, because a vague deposit clause invites disputes you don’t want to be having while trying to close on a house.
Where to Send the Deposit
Earnest money is almost always held by a neutral third party. The most common holders are title companies, escrow agents, and real estate attorneys, each of whom places the funds in a dedicated trust or escrow account. In some transactions, the listing brokerage holds the deposit in its own regulated escrow account.
The purchase agreement should name the specific party responsible for holding the funds. Before you can meet the deadline, you need the correct entity name, account number, and any file or reference number. Sending money to the wrong account can delay the transaction or expose you to fraud. Never hand earnest money directly to the seller.
How to Pay It
Wire transfers are the most common method, especially for larger amounts. Your escrow officer or title company will provide routing and account details, and once the transfer is complete, your bank will issue a reference number you can use to confirm the funds arrived. Cashier’s checks and certified checks are also widely accepted and can be delivered in person to the escrow holder’s office.
Personal checks are rarely accepted because they take several days to clear, and the escrow holder needs verified funds quickly. Whichever method you use, get a written receipt or signed acknowledgment from the party holding the deposit. That receipt is your proof of performance if anyone later disputes whether you met the deadline.
Verify Wiring Instructions Before You Send
Wire fraud targeting real estate transactions is a serious and growing problem. The FBI’s Internet Crime Complaint Center recorded 9,359 real estate fraud complaints in 2024, and business email compromise schemes, the primary method used to redirect earnest money wires, accounted for roughly $2.77 billion in total losses across all industries that year.1FBI Internet Crime Complaint Center. 2024 IC3 Annual Report Criminals typically hack or spoof an email from your agent, title company, or lender, then send fake wiring instructions that route your deposit to a fraudulent account.
Verify all wiring instructions by calling the escrow holder at a phone number you already have on file, not a number pulled from the email itself. Treat any last-minute change to wire details as suspicious until you confirm it by voice. Call again to confirm receipt immediately after sending. If something feels off, stop and verify before the money moves.
What Happens If You Miss the Deadline
Failing to deposit your earnest money on time creates a serious problem. Many real estate contracts include a “time is of the essence” clause, which makes deadlines strict and enforceable. Even a one-day delay can be treated as a breach.
When that happens, the seller may send you a notice to perform, giving you a short cure period, often two to five days depending on the contract, to deliver the deposit before the agreement is formally terminated. If you don’t cure the breach within that window, the seller can cancel the contract and move on to another buyer with no further obligation to you.
Some contracts make the agreement voidable upon a missed deadline, meaning the seller can choose to either enforce the deal or walk away. Either way, the practical result is the same: you lose the property, and depending on the contract terms you may face additional financial consequences on top of that.
How Much You’ll Be Depositing by the Deadline
Knowing when the money is due is only useful if you also know how much to send. Earnest money deposits generally range from 1% to 10% of the purchase price, with 1% to 3% being most common in balanced markets. The amount is negotiable and depends heavily on local conditions.
- In buyer-friendly markets, deposits often land around 1% to 2% of the purchase price.
- In competitive or seller-friendly markets, buyers frequently offer 3% to 5%, sometimes more, to make their offer stand out against multiple bids.
- In high-cost metro areas, 3% or more is common because it signals stronger financial commitment on a larger purchase.
No federal law caps how much a seller can request. Any limits come from state or local rules, so check the norms where you’re buying. Only commit to an amount you can afford to have tied up in escrow for weeks or months, because once the clock starts after acceptance, you have very little time to come up with the funds.
A Practical Checklist Before You Sign
The deposit clause is one of the most time-sensitive provisions in any purchase agreement, and most problems come from signing without a clear plan to meet it. Before you execute the contract:
- Confirm the exact deadline and whether it runs in business days or calendar days.
- Confirm when the clock starts: at verbal acceptance, at the last signature, or on delivery of a fully executed document.
- Get the escrow holder’s name, account details, and file reference in writing.
- Decide on your payment method and make sure your bank can execute a wire or issue a cashier’s check within the window.
- Build in time to verify wiring instructions by phone before sending.
Handling those items up front turns a tight deadline into a routine step. Leaving them for after signing is how buyers end up scrambling, missing the window, and handing the seller a reason to terminate.