RexMont

Seller guide · Pending · Washington

The buyer's earnest money: where it sits and what it means for you

Earnest money is the buyer's deposit toward the purchase, delivered shortly after mutual acceptance and held by a neutral party until closing. You never handle it, but you have a real interest in it: it is the buyer's commitment made visible, and under the purchase and sale agreement it is one of the things that protects you if the buyer walks away without a contractual reason. This guide explains where the money goes, how you learn it arrived, and what decides who receives it if the sale does not close.

The first few days after mutual acceptance, when Form 21 requires the buyer to deliver the deposit, and again at any point a contingency ends the sale.

Adriano Tori, Designated Broker
Adriano Tori · Designated Broker
WA Lic. #27660 · 5.0 (1,241)

Forms and documents that govern this step

  • Form 21 — Residential Real Estate Purchase and Sale Agreement (earnest money, buyer's default)
  • Form 89 — Earnest Money Receipt
  • Form 35 — Inspection Addendum
  • Form 22A — Financing Addendum
  • Form 22T — Title Contingency Addendum

Where the deposit is held

Form 21 states the amount of earnest money, the form it takes (usually a wire or a check), and who holds it. On most Eastside sales the holder is either the buyer's brokerage, which deposits it into a trust account, or the closing agent, which is the escrow company named in the agreement. The money is not paid to you, and it is not paid to RexMont. It sits in trust until closing, when it is credited toward the buyer's purchase price and down payment on the settlement statement.

The deadline for delivery is printed in the earnest money paragraph of Form 21, counted in days after mutual acceptance. Your agent knows the number on your contract and Jennifer, RexMont's transaction administrator, calendars it the day the agreement is signed.

Because the deposit belongs to the transaction and not to either party, neither side can ask the holder to release it unilaterally. That neutrality is the point: it lets a buyer commit real money before the contingencies are resolved, and it lets you rely on the money being there if the buyer defaults.

Form 89: how you know it arrived

When the holder receives the funds, it signs an Earnest Money Receipt, Form 89, confirming the amount, the date received, and the account the money went into. The buyer's side delivers a copy to the listing side. That receipt is the document that closes the loop; a text from the buyer's agent saying the wire was sent is not.

Jennifer asks for the Form 89 the day the deposit is due and stores it in your transaction file. If it has not arrived by the deadline she raises it with your agent the same day, because a late deposit is one of the earliest signals in a transaction and the contract treats it seriously.

You will not be asked to sign the receipt. Your only job is to know it exists and to ask your agent if you have not heard that it came in.

If the deposit is late

Most late deposits are bank timing: a wire sent Friday afternoon that posts Monday, or a check that the buyer's brokerage has to walk to the bank. A day of lag is common and rarely means anything about the buyer's intent.

Even so, the contract gives you remedies. Form 21 treats the buyer's failure to deliver earnest money on time as a breach, and it spells out what the seller may do about it, including notice and a path to terminate the agreement if the money never comes. Those remedies are yours, but they are exercised through your agent and, if the situation calls for it, an attorney. Do not contact the buyer or the buyer's agent about the deposit yourself; a misstep in how notice is given can weaken your position.

What usually happens is simpler. Your agent asks the buyer's agent for the wire confirmation, the money lands a day or two later, the Form 89 follows, and the file moves on. You hear about it either way.

When it comes back to the buyer, and when it stays with you

The earnest money is returned to the buyer when the buyer ends the sale through a contingency that the contract gives them and does so within the window the addendum sets. The common ones are the inspection contingency in Form 35, the financing contingency in Form 22A, the title contingency in Form 22T, the statutory rescission right attached to the Form 17 seller disclosure statement, and the review period on a condominium or HOA resale certificate. In each case the addendum states the deadline and how notice must be given.

The earnest money can stay with you when the buyer fails to close without a contingency to stand on. Form 21 has a buyer's default paragraph with two boxes; the one checked on your agreement decides whether the deposit is your sole remedy as liquidated damages or whether you keep other remedies as well. Washington law caps earnest money forfeited as liquidated damages at five percent of the purchase price.

If the parties disagree about who gets the money, the holder does not decide. It follows the notice-and-release procedure in the agreement and state law, and if the disagreement persists the funds are deposited with the court. That is a legal process; your agent will route you to an attorney if it comes to that.

Why you will never receive wiring instructions from the buyer

The buyer's deposit never touches your accounts, so no legitimate party will ever ask you for wiring instructions to receive it, and no legitimate party will send you instructions to forward it anywhere. If an email, text, or call about the buyer's earnest money reaches you and asks for account details or asks you to move money, it is fraud. Delete it and tell your agent.

The only money you receive in this transaction is your sale proceeds, paid by the escrow company after the deed records. Escrow will collect your proceeds instructions in person or by a process it verifies with you by phone, and it will not change them by email. The escrow-signing guide covers that step.

Real estate wire fraud in the Puget Sound region typically starts with a compromised email account somewhere in the chain and an urgent message about a change in instructions. Slowing down and calling a number you already have, never one in the message, defeats it.

Your checklist

  1. 1Note the earnest money amount and the delivery deadline printed in Form 21; your agent will tell you the date.
  2. 2Ask your agent to confirm the Form 89 receipt has arrived once the deadline passes.
  3. 3If you hear the deposit is late, leave the contact with the buyer's side to your agent.
  4. 4Keep the contingency dates from Form 35, 22A, and 22T in view; they decide whether a buyer's exit returns the deposit.
  5. 5Treat any message about wiring or moving earnest money as fraud and report it to your agent.
  6. 6Keep your own proceeds instructions for the escrow signing appointment, verified with escrow by phone.

What RexMont tracks for you

  • The earnest money due date from Form 21, calendared the day of mutual acceptance.
  • Receipt of the Form 89 and a copy filed in your transaction record.
  • Any late or short delivery, raised with your agent the same day.
  • Which contingencies are still open and their expiration dates, so you always know whether a buyer exit would return the deposit.
  • Escrow's confirmation that the deposit shows as a credit on the buyer's settlement statement before closing.

Jennifer Johansen, RexMont’s transaction administrator, coordinates every date and document from mutual acceptance to keys. Questions on price, terms, or strategy go to your RexMont agent.

This guide explains the process and the standard NWMLS forms in general terms. It is not legal, tax, or lending advice, and your contract controls. Talk to your RexMont agent, escrow officer, lender, or attorney about your specific situation.

Questions

Common questions about the buyer's earnest money

How much earnest money is typical on the Eastside?

There is no rule. The amount is whatever the buyer offered and you accepted, and it appears in Form 21. Deposits on Bellevue and Seattle homes commonly run one to three percent of the price, with larger deposits used to strengthen an offer in competition. Your agent can tell you how the amount on your contract compares.

Can I see proof that the money arrived?

Yes. The Form 89 Earnest Money Receipt, signed by the holder, is delivered to the listing side. Jennifer keeps it in your file and your agent can send you a copy. It confirms the amount and the date the funds were received.

The buyer's deposit is a day late. Is the deal in trouble?

Usually not. Wires and trust-account deposits often lag a business day. Form 21 does give you remedies for a late deposit, and your agent will ask the buyer's agent for confirmation right away, but a short delay is rarely a sign of a problem. Your agent will tell you if it becomes one.

If the buyer backs out after the inspection, do I keep the earnest money?

Not if the buyer terminates within the Form 35 inspection window and gives notice the way the addendum requires. The inspection contingency exists so the buyer can end the sale and recover the deposit. The deposit stays with you when a buyer fails to close without a contingency to rely on.

Who decides a dispute over the earnest money?

Not the holder. The escrow company or brokerage holding the funds follows the notice-and-release procedure in the agreement and Washington law. If the parties still disagree, the funds are deposited with the court, which decides. Your agent will route you to an attorney if a dispute arises.

Does the earnest money count toward what the buyer pays me?

Yes. At closing the deposit is credited to the buyer on the settlement statement, reducing the cash the buyer brings in. It becomes part of the purchase price you receive, along with the buyer's loan funds and remaining down payment.

Adriano Tori, Designated Broker — RexMont Real Estate

Page author

Adriano Tori

Designated Broker, Founder & CEO — RexMont Real Estate · WA Lic. #27660

Reviewed by Adriano Tori, Designated Broker · last reviewed September 9, 2026

5.0 · 1,241 Google reviewsBest of 2026NWMLS MemberAbout Adriano →

Other audiences: Buyer guides