Earnest Money Agreement Template: Deposit, Escrow and Terms

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Earnest Money Agreement Template

This Earnest Money Agreement is made on [Date] by and between:

Buyer: [Full Name]

Address: [Address]

Seller: [Full Name]

Address: [Address]

Escrow Holder: [Escrow Agent / Title Company / Broker / Attorney / Other]

Address: [Address]

1. Property Information

This Agreement relates to the following property:

Property Address: [Property Address]

City, State, ZIP Code: [City, State, ZIP Code]

Legal Description, if applicable:

[Insert legal description]

This earnest money deposit is connected to the following transaction:

☐ purchase and sale agreement dated [Date]

☐ offer to purchase dated [Date]

☐ option agreement dated [Date]

☐ other related agreement: [Describe]

Reference details, if any:

[Insert reference number or identifying details]

3. Earnest Money Deposit

The Buyer agrees to deposit earnest money in the amount of:

[$Amount]

The earnest money shall be paid by:

☐ personal check

☐ cashier’s check

☐ wire transfer

☐ certified funds

☐ other: [Describe]

The deposit must be delivered no later than:

[Date and Time]

4. Escrow Holder Duties

The Escrow Holder shall hold the earnest money in escrow pending the terms of the related transaction and this Agreement.

The Escrow Holder shall:

hold the funds in a designated account, if required;

disburse the funds only as allowed by this Agreement, the related contract, or written instructions of the parties;

maintain reasonable records of receipt and disbursement;

act in a neutral capacity unless otherwise required by law or written agreement.

Additional escrow instructions, if any:

[Insert details]

5. Application of Earnest Money at Closing

If the transaction closes, the earnest money shall be:

☐ credited toward the purchase price

☐ credited toward closing costs

☐ applied as follows: [Describe]

6. Return or Release of Earnest Money

If the transaction does not close, the earnest money shall be handled as follows:

☐ returned to Buyer if the contract is properly terminated under a contingency or cancellation right

☐ released to Seller if Buyer defaults under the related agreement

☐ released according to joint written instructions of Buyer and Seller

☐ released as required by court order or applicable law

☐ other: [Describe]

Additional release terms, if any:

7. Dispute Over Earnest Money

If Buyer and Seller dispute the release of the earnest money, the Escrow Holder may:

☐ continue holding the funds until written agreement is reached

☐ release the funds only under court order

☐ interplead the funds if permitted by law

☐ act as otherwise stated here: [Describe]

Any costs, fees, or legal expenses relating to a deposit dispute shall be handled as follows:

[Insert terms]

8. Failure to Make Deposit

If Buyer does not deliver the earnest money as required, the following shall apply:

☐ the related agreement may be terminated by Seller

☐ Buyer shall be in default

☐ the parties may extend the deadline in writing

☐ other: [Describe]

9. Interest on Funds

Interest earned on the earnest money, if any, shall belong to:

☐ Buyer

☐ Seller

☐ be credited at closing

☐ be handled as follows: [Describe]

If no interest is intended, write:

[None]

10. Notices

Any notice regarding the earnest money shall be sent to:

Buyer Notice Address: [Address]

Seller Notice Address: [Address]

Escrow Holder Notice Address: [Address]

Notice may be delivered by:

☐ email

☐ personal delivery

☐ certified mail

☐ overnight courier

☐ other: [Describe]

Except as specifically stated in this Agreement, this document does not change the other terms of the related purchase, sale, option, or transaction agreement.

If there is a conflict between this Agreement and the related contract, the following shall apply:

12. Governing Law

This Agreement shall be governed by the laws of the state of [State].

13. Entire Agreement

This Agreement contains the full understanding of the parties regarding the earnest money deposit described above and replaces prior discussions on that subject unless otherwise stated in writing.

14. Signatures

Buyer Signature: __________________________

Name: [Full Name]

Date: [Date]

Seller Signature: __________________________

Name: [Full Name]

Date: [Date]

Escrow Holder Signature: __________________________

Name: [Full Name]

Title: [Title, if applicable]

Date: [Date]

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Earnest Money Agreement Template: Deposit, Escrow and Terms

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Earnest Money Agreement Template — quick answers

Reviewed July 2026 Free download, PDF & DOCX

What is an earnest money agreement?

An earnest money agreement is a written document that explains how a buyer’s good-faith deposit will be paid, held, and released in connection with a pending real estate transaction. It usually identifies the parties, the property, the deposit amount, the escrow holder, and the conditions under which the money may be returned, credited, or forfeited. It helps create a clear record of how the deposit should be handled.

Why do you need an earnest money agreement?

You need an earnest money agreement to clearly define the terms for holding and releasing a buyer’s deposit. It helps explain when the deposit must be paid, who will hold it, whether it will be credited at closing, and what happens if the transaction closes, is canceled, or falls through. A written agreement also helps reduce disputes about escrow funds and payment timing.

When should you use an earnest money agreement?

Use an earnest money agreement when a buyer and seller want written terms for a deposit being paid in connection with a real estate purchase, pending contract, option period, or related transaction. It is commonly used when funds are being placed with a broker, title company, attorney, escrow agent, or other agreed holder before closing.

How to write an earnest money agreement?

Start with the names of the buyer, seller, and escrow holder, then identify the property and the related sale or purchase agreement. After that, state the earnest money amount, the deadline for payment, how the money will be held, and when it may be applied, refunded, or released. Finish with terms covering disputes, termination, and signatures so the agreement is clear and practical.

Can AI Lawyer help if buyers, sellers, and escrow staff all need to review?

AI Lawyer can help by organizing the agreement into clear sections so each reviewer can find the relevant details quickly. It can also add internal reference fields, payment notes, and placeholders that make updates easier to track. A consistent structure helps reduce repeated edits and lowers the chance of missing key details like deposit deadlines, escrow instructions, release conditions, or property references before the agreement is signed.

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