What is earnest money and can I lose it?

The short answer

It is a good faith deposit held in escrow that counts toward your closing funds, and it is protected by your contract contingencies.

4 min read

Where the money goes

Earnest money is not paid to the seller. It is deposited with a neutral third party, usually the title company or a broker escrow account, and it sits there until settlement.

At closing it is credited to you. It reduces the cash you wire, dollar for dollar.

When it is at risk

Your contract contingencies are the protection. If you withdraw for a reason the contract allows, such as an inspection issue or a financing denial within the stated window, the deposit is generally returned.

Risk appears when you walk away outside those windows, or when a deadline passes without written notice. Deadlines in a purchase contract are real dates, not suggestions. Calendar them the day you go under contract.

Corie Adams Lending Team

Corie Adams
Producing Branch Manager · NMLS #1875205
Network Funding, LP · NMLS ID #2297

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Corie Adams Lending Team is a branch of Network Funding, LP. Network Funding, LP, NMLS ID #2297, is an Equal Housing Opportunity Lender. Licensing and state disclosures are available through Disclosures & Licensing and NMLS Consumer Access (www.nmlsconsumeraccess.org). This website is not a commitment to lend. Rates, programs, payments, and qualification requirements are subject to change without notice and may vary based on individual circumstances.

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