Earnest money deadlines: when it's due and what if it's late

Earnest money is usually due within a few days of acceptance, delivered to the escrow, title company, attorney or broker named in the contract. The purchase agreement sets the exact deadline, often in business days. If it arrives late, many contracts let the seller terminate, sometimes only after written notice. Once deposited, it's released only under the contract's terms.

More on this topic: Contract to close: process and checklists, every guide in one place.

The earnest money deadline is the first date on almost every file, and one of the easiest to miss: it falls in the busy first days, it often counts business days when the rest of the contract counts calendar days, and it depends on the buyer actually moving money. Here's how to handle it. Closingbird's AI contract reading pulls the deposit deadline from the executed contract on day one.

Earnest money in one table

How the deadline is counted

Read the deposit paragraph and the contract's definitions together:

• Business or calendar days? Earnest money is one of the deadlines many forms count in business days.
• From when? Usually acceptance, but sometimes from the escrow being opened or from receipt of escrow instructions.
• Delivered or deposited? "Delivered to the escrow holder" and "deposited in the trust account" can be different moments.
• Weekends and holidays. Does a deadline that lands on one roll forward?

As an example, with a Tuesday acceptance and a deposit due within three business days, counting the day after acceptance as day one and skipping weekends, the deadline is Friday. If the contract counts calendar days instead, a Saturday deadline may stay on Saturday. Our guide to calendar days vs business days covers the details. Check your state's contract for the actual number and counting rule.

What happens if earnest money is late

It depends on the contract, but these are the common patterns:

• The seller may terminate. Many forms make a late or bounced deposit a buyer default, which can let the seller cancel.
• Notice may come first. Some forms require the seller to give written notice and a short cure period before cancelling.
• Timing of the notice can matter. On some forms, if the deposit arrives before the seller's termination notice, the seller loses the right to terminate for lateness.
• The seller can choose to carry on. A late deposit doesn't end the contract by itself on most forms. Get any acceptance of a late deposit in writing.

If a deposit is going to be late, tell the listing side before the deadline and ask for a signed extension. See what happens if you miss a deadline for the first steps when one has already passed.

When the buyer gets it back, and when they don't

In general, a buyer who cancels properly under a contingency, within its deadline, can expect the deposit back under the contract's terms. A buyer who defaults outside a contingency may lose it, and some contracts limit the seller's remedy to keeping it. Escrow holders usually need signed release instructions from both parties, or a court order or other process set by state law, before they release disputed funds. The release form and the rules differ by state.

Protect the deposit from wire fraud

The earnest money wire is often the first time a buyer sends a large sum on the file, and criminals know it. Tell the buyer on day one that wiring instructions come only from the escrow holder and must be confirmed by phone on a number they find themselves. The FBI's Internet Crime Complaint Center (IC3) takes reports at ic3.gov. See our wire fraud checklist.

An earnest money checklist

• Note the amount, the escrow holder and the deadline, with its counting rule, on day one.
• Point the buyer to the escrow holder for payment instructions. Never forward bank details by email.
• Remind the buyer a day before the deadline.
• Get a written receipt from the escrow holder, with the date received, and file it.
• Send the receipt to the listing side.
• Add any additional deposit to the file with its own deadline.
• If the deal ends, get the release form signed by both parties.

Closingbird adds the earnest money deadline from the executed contract with AI contract reading, counted in business days when the contract says so, and document requests collect the receipt from escrow with automatic reminders. Closingbird never sends wiring instructions.

This guide is general information, not legal advice. Deposit rules and escrow practice vary by state; check your state's contract.

Frequently asked questions

When is earnest money due?

Whenever the purchase contract says, often within a few days of acceptance. Many forms count this deadline in business days. Check the deposit paragraph and the contract's definition of days.

What happens if the buyer is late with earnest money?

Often the seller gains the right to terminate, sometimes only after written notice and a cure period. The seller can also choose to accept the late deposit; put that in writing.

Who holds the earnest money?

The escrow holder named in the contract: a title company, escrow company, closing attorney or brokerage trust account, depending on the state and the deal.

Is earnest money refundable?

Usually, if the buyer cancels properly under a contingency before its deadline. A buyer who defaults outside a contingency may lose it. Escrow normally releases it only with both parties' signed instructions or as state law allows.