Do You Get Earnest Money Back? 


During the home buying process, you’ll likely come across the term “earnest money.” But what is it and do you get your earnest money back? That answer depends on your situation. Here are a few things you need to know.


Understanding earnest money

Earnest money is a cash amount that is included as part of your offer on a home. It’s usually about one to three percent of your offer although in a hot seller's market, increasing your earnest money can help with bidding wars.


How do I decide how much earnest money to offer?

This is a conversation that you should have with your real estate agent. They will help you determine this amount once you have found a home you like and you are ready to make an offer. The amount of earnest money you are willing to put down will be included in your original offer. Keep in mind that offering a low amount could make a seller wary, so make sure to land on the right number with your agent.


When is earnest money due?

Most earnest money is due within one to three days of an accepted offer. You’ll typically pay earnest money in the form of a personal check, certified check, or wire transfer.


Where is earnest money held?

Your earnest money will be held by a third party. This legal arrangement is called escrow, a service typically provided by either a title company or lawyer. This neutral account helps ensure that neither the buyer nor the seller walks away with the earnest money until certain conditions have been met.


Do you get earnest money back?

In the ideal scenario, a seller will accept your offer and you will put up earnest money. At closing, this earnest money will count toward the total amount you owe at closing—including your down payment. That means that you don’t necessarily get earnest money back, but it will go toward the purchase of your home.


Situations in which you might want your earnest money back

Of course, not every situation is ideal when you’re trying to purchase a home. Certain issues can arise in which you will want your earnest money back. These include:


Failed inspection

It’s ok for a house to fail an inspection, however, the seller will then have to address the issues. They can do this by fixing the problem or offering the buyer a credit. If the seller and buyer can’t agree on how the issues should be resolved, the buyer can walk away and get their earnest money back.


Buyer’s remorse

You might change your mind about making an offer. Perhaps because you found another home that you like better, or simply because you are no longer interested in purchasing a home. In some situations, you might get your earnest money back. This is true if you are still within the timeframe set by the contract in your original offer. However, different states handle this in different ways so be sure to ask your agent about the terms when you are drafting your offer.


Buyer or seller can’t meet the terms

If a buyer’s financing falls through, or the seller is unable to find a new home, one party may have to back out of the contract. In this case, the buyer should get their earnest money back as long as they have a contingency plan in place. Make sure your agent or lawyer has this in place for your protection.



Earnest money helps establish a good faith offer. It’s there to protect a seller if a buyer takes months to complete the process and then backs out, costing the seller time and other prospective buyers.


But in most cases, you can get your earnest money back if something goes truly wrong. Just make sure you work with your agent to set reasonable timelines and contingency plans that protect you if something goes wrong. Use this checklist for buying a house to help you get through the process.


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Published 03.24.22

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