Earnest money is a good-faith deposit a buyer makes to show the seller they are serious about the purchase.
Earnest Money 💵 You may have heard this term before, but what it is? 🤔 When do I pay Earnest Money? Do I get my Earnest Money back when I cancel the contract? Learn all you need to know about Earnest Money in this Video! 💡💰
How Much Earnest Money Should You Offer?
In Arizona, earnest money is commonly around 1% to 2% of the purchase price, though the right amount depends on the market and the home. It is held in escrow by the title company and is usually applied to your down payment or closing costs at closing.
If you cancel within your contract rights, such as during the inspection period, your earnest money is generally returned. If you breach the contract, you could lose it. That is why understanding every deadline matters.
A stronger deposit can help your offer stand out. I will help you choose the right amount and protect it. See my buyer resources.
Timing matters too. The purchase contract sets when your deposit is due, and missing that deadline can create problems before your deal even gets started. Always confirm wiring instructions directly with the title company by phone, because wire fraud schemes often target buyers at this stage. Once funds arrive, the title company will send you a receipt so you have a record. If a dispute ever arises, the contract controls how the funds are released, so reading it carefully up front protects you. For general consumer information on real estate transactions, visit the Arizona Department of Real Estate.
