01
Deal closes
Earnest money applies toward down payment or seller proceeds as written in the purchase agreement. Escrow releases on signed closing instructions.
Earnest money escrow
Hold earnest money until contingencies clear
After offer acceptance, the buyer's deposit goes into escrow instead of someone's personal or brokerage account. It stays there through inspection, financing, and title work.
TXN-66102
1842 Oak Lane, Austin TX
Deposit
$25,000
Status
Contingency period in progress
Segregated
Deposits held apart from operating accounts
In writing
Contingencies and closing dates on the deal file
Shared status
Buyer and seller see the same funded view
Held on dispute
No release while terms are contested
Contingency window
What stays on the record before closing
Inspection, financing, title, and contract deadlines go on the transaction before funding. When something comes up, both sides point to the same record instead of comparing text messages.
Contingency
How escrow treats it
Home inspection
The buyer inspects during the agreed window. If the contract allows cancellation because of defects, escrow follows those terms rather than an informal agreement afterward.
Financing and appraisal
Loan approval and appraisal results stay on the deal file. If financing fails within contingency rights, the deposit stays in escrow until return conditions are met.
Title and liens
Title requirements are set before funding. Escrow does not release seller proceeds until the title conditions in the purchase agreement are satisfied.
Contract deadlines
Funding, inspection, and closing dates live on the transaction so neither side is working from a different calendar.
Who this is for
Buyers and sellers both want a paper trail
The deposit needs a receipt everyone trusts: proof it was funded, rules for return if inspection or financing fails, and a clear path if closing day actually arrives.
Home buyers
Your money sits in escrow, not in an agent's personal account. If inspection, financing, or title fails under the contract, return follows the terms you signed at funding.
Home sellers
You can see when escrow is funded before you stop showings. Release toward closing requires signed instructions, not a last-minute text.
Agents coordinating three-party visibility? See broker escrow
How it works
From offer acceptance to close or return
Write the terms first, then fund. The contingency clock runs against that agreement until you close or cancel under contract.
- 1
Record earnest terms
Lock in deposit amount, property address, contingency list, and closing timeline on the transaction before the buyer sends money.
- 2
Buyer funds escrow
Earnest money moves into segregated escrow. Buyer and seller both see when the file shows funded.
- 3
Contingency period runs
Inspection, financing, and title milestones are tracked against the contract. The deposit stays in escrow the whole time.
- 4
Close or return
At closing, funds apply per the agreement. If the deal terminates under contract terms, disbursement follows the cancellation rules you recorded at funding.
End states
How the deposit gets released or returned
Each path follows the purchase agreement and signed closing instructions. Escrow does not move money on verbal requests after funding.
02
Buyer exits on contingency
If the buyer terminates within contract rights (failed inspection, denied loan, title problem), return follows the cancellation terms agreed when the deposit was funded.
03
Parties dispute
Funds stay in escrow while Trustners runs the dispute workflow. Nothing moves out until the case resolves or both parties sign off.
FAQ
Earnest money escrow questions
Common questions about residential deposits, contingency returns, and how this differs from broker-led coordination.
Open an earnest money escrow file
Record the deposit amount, property address, and contingencies before the buyer wires. If an agent is running the close, broker escrow can add three-party visibility on top of this workflow.
