What earnest money is
Earnest money is a deposit a buyer may provide under the purchase agreement to show a commitment to the transaction. It is not the same as the down payment or closing costs, although it may be credited as provided by the agreement at closing.
What the contract should identify
Review the written agreement for the deposit amount, due date, recipient or escrow holder, delivery method, handling instructions, and what happens if the transaction closes, terminates, or becomes disputed. The signed contract controls; do not rely on a general internet explanation.
How contingencies relate to the deposit
Inspection, financing, appraisal, insurance, title, and other contingencies may create rights or deadlines, but the effect on earnest money depends on the actual language and required notices. A contingency does not automatically guarantee a refund. Raise questions before a deadline passes.
Read the complete buyer-contingencies guide →
Where the money goes
Follow the agreement and the escrow holder’s instructions. Ask who is holding the funds, how receipt will be confirmed, and what documentation you should retain. If a dispute arises, the escrow holder and the parties may need to follow the process required by the agreement and applicable law.
Protect yourself from wire fraud
Real-estate wiring instructions are a common fraud target. Treat an unexpected change in payment instructions as suspicious. Before sending funds, independently call a trusted, previously verified number for the title or escrow professional and confirm the account details. Do not rely only on an email, forwarded message, or phone number in a new message.
New Orleans transaction questions
The timing and handling of deposits can interact with inspections, title work, lender requirements, insurance, condominium documents, and closing coordination. Older homes, multifamily properties, condos, and transactions with unusual repairs or financing may involve additional questions. Ask the responsible professional early enough to meet the written deadline.
Buyer checklist
- Read the deposit section of the signed agreement.
- Calendar the exact delivery deadline and confirm the required method.
- Verify the recipient, escrow holder, and receipt of funds.
- Keep proof of delivery and written confirmations.
- Understand how each contingency and notice may affect the deposit.
- Independently verify wiring instructions before sending money.
- Ask an attorney about legal rights or a disputed deposit.
Questions to ask your team
- Is the deposit credited at closing, and how is that shown?
- What happens if an inspection, loan, appraisal, insurance, or title issue arises?
- Who must deliver a notice, and by what date?
- Who holds the money and what is the procedure if the parties disagree?
Jonathan can help coordinate transaction communication. Your title or escrow professional can explain handling procedures, your lender can explain financing, and an attorney can explain legal rights or contract interpretation.
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