Earnest money, explained

Earnest money is a deposit you make with your offer to show you're serious. A party named in the contract (often a title or escrow company, an attorney or a broker) holds it, and at closing it counts toward what you pay. Known¹

Your deposit shows good faith: it's usually returned if you cancel for a reason the contract allows and can be lost if you don't follow it. Rule²

Whether you get it back if the deal falls through depends on your contract and its contingencies. Rule¹

• Ask who holds your deposit and how they accept it.
• Send it by your contract's deadline.
• Keep the receipt. Rule²

Before you send money, call the company at a phone number you already have and confirm the account name and number. Never use payment instructions, phone numbers or links from an email: scammers copy real ones. Sent money to the wrong place? Call your bank right away to ask for a recall, and report it at ic3.gov. Known^3,4

• Texas: Due within 3 days after the effective date, extended past weekends and Texas holidays; the option fee also goes to the escrow agent within 3 days.
• California: Due within 3 business days after acceptance, usually by wire.
• Illinois: The first deposit is due within the business days your contract states; a second often follows attorney review.
• New York: Paid when you sign the contract (commonly 10%) and held in the seller's attorney's escrow account. Rule^5,6,7,8