Who holds earnest money and what rules control when it's released?

Who holds my earnest money and when do I get it back?

You want to know who keeps your earnest money safe and when you can get it back if something goes wrong with the home purchase. Earnest money typically goes to a neutral third party—either the title company, an attorney, or the real estate brokerage—who holds the funds in a special escrow account until closing.

The purchase agreement spells out when earnest money gets released. Common scenarios include: the sale closes successfully (money goes toward your down payment), you back out for a reason covered by a contingency like inspection or financing (you get the money back), or you withdraw without a valid reason (the seller may keep the earnest money). The specific rules depend on what contingencies you negotiated and the deadlines in your contract. If there's a dispute about who should get the earnest money, the holder typically won't release it until both parties agree in writing or a court decides. Review your purchase agreement to understand your specific contingencies and timelines. Share any questions about release conditions with your real estate agent or attorney, and they can walk you through the terms that apply to your situation.