What is earnest money in Scottsdale, Arizona, and do you get it back?

Earnest money is the deposit a buyer puts down after the seller accepts the offer, and whether you get it back depends on your purchase contract. If the sale closes, it is credited to you. If you cancel for a reason your contract covers, and you do it on time, it is generally refunded. If you cancel for a reason the contract does not cover, the seller may keep it. Redfin and a Scottsdale real estate team, the Holmes Team, describe it the same way.

I'm Jen Keene, a REALTOR® with eXp Luxury in Scottsdale, AZ, and I'm the agent people call at every stage of their life. I read what Redfin, the Holmes Team, the National Association of REALTORS® (NAR) and Aceable Agent say about earnest money and put it in one place, with the source named next to each fact.

This is general information, not legal advice. These are national and consumer-level guides, so your own signed contract is what counts, and I'd have your agent or an attorney read it with you before you rely on any of this. I checked each source on November 7, 2026.

A neutral company, most often the escrow or title company handling your closing. Redfin says a neutral third party, an escrow company or title company, holds the funds until closing, and the Holmes Team says the escrow or title company usually holds them, although the funds may sit in a brokerage trust account if both sides agree. NAR's REALTOR® Magazine says the money may be held by a broker, a title company or an attorney. So your contract decides who holds yours, and it is worth reading that line before you sign.

When the holder is an escrow company, Aceable Agent says it receives the deposit by check or by wire once the escrow account is open, and then sends a receipt to all parties. I'd ask the escrow officer how they want the money sent, and I'd confirm the instructions with them by phone before you send anything. You can read more about what escrow is in my post on what escrow is and what happens during it in Arizona.

If the sale closes, the deposit is applied to what you owe, and you don't lose it. Redfin says that when the deal moves forward, your earnest money is applied toward your down payment or closing costs, and that if you're financing, the escrow or title company typically sends the money to your lender. That is Redfin's wording and I did not find a second source that describes the step, so ask the escrow officer to show you where the deposit appears on your closing paperwork.

The deposit is not an extra fee on top of your costs. It is money you were going to pay anyway, paid early and held by someone neutral. For what else goes into a closing, here's who pays what in closing costs in Arizona.

Generally when you cancel for a reason your contract covers and you follow the contract's steps on time. Redfin says that if you cancel for a reason covered by a contingency, you're generally refunded, and the Holmes Team says that if you cancel under a valid contingency on time, you usually get your deposit back. A contingency is a condition written into the contract that lets you cancel if it isn't met. Redfin lists an inspection that turns up major problems within the inspection period, a buyer who can't get financing, a home that appraises below the offer price when the seller won't adjust, and a title issue that can't be cleared.

Those are Redfin's examples of what contracts commonly cover, and your contract might word them differently or not include one. What matters is the contingency itself and the date or steps your contract attaches to it. If you're deciding what to do with the inspection, here's how the inspection period works in Arizona.

When you cancel for a reason your contract doesn't cover, or you miss a deadline it sets. Redfin says the seller is typically entitled to keep the deposit when the buyer cancels for a reason no contingency covers, and that this can also happen when the buyer misses a contingency deadline, waives contingencies or otherwise breaches the contract. The Holmes Team says that if you breach without an applicable contingency, the deposit can be at risk and may go to the seller as damages, depending on what your contract says about remedies.

Both sources point back to the contract, so I would not guess at the outcome. If you're thinking about backing out, or about waiving a contingency to make your offer stronger, read that part of the contract first and talk to your agent or an attorney before you decide.

Ask the questions that tell you where the money is and what the contract says about it. These are the ones I'd put to the escrow officer:

• Have you received my deposit, and can I get a written receipt?
• How do you want me to send it, and can I confirm the instructions with you by phone before I do?
• Where does the deposit show up on my closing paperwork?
• If I cancel, what does the escrow company need from me and from the seller before it releases the deposit?

The last question matters because an escrow company generally acts on instructions both sides have signed and not on its own opinion of who is right. Your agent can tell you which of your contract's dates and conditions apply to you, and the escrow officer can tell you how that company handles the money.

The escrow company generally keeps holding it. The Holmes Team says the holder typically keeps the funds until both parties sign a release, or a court or arbitrator directs where they go, and Redfin says the escrow holder releases the deposit once both parties sign a release agreement and that until then it generally stays in escrow. NAR's REALTOR® Magazine says an escrow agent or broker shouldn't release funds unless both parties sign a release.

NAR also says that if your contract requires mediation or arbitration, you have to go through it before litigation, and that otherwise the escrow agent typically files a lawsuit called an interpleader to leave the dispute, with the funds going into the court's registry. It adds that the agent is typically reimbursed from the escrow for attorney's fees and costs, which reduces what the parties receive, and it encourages an amicable settlement. That is one source, an article from 2020 that notes its information may not be current, so treat it as a general picture.

If a dispute starts, tell the escrow company promptly and in writing, follow the notice steps in your contract, and have an attorney read the contract with you. I can't tell you who is entitled to the money, and neither can the escrow officer.

Here's how buying a home works in Arizona, step by step, and here's what escrow is and what happens during it. If you're getting ready to make an offer, the inspection period and the closing costs posts are the two I'd read first.

If you have a home in mind and want help reading the deposit and contingency terms in your contract, get in touch or call me at (480) 203-6605. For anything that turns on the exact wording of your contract, an attorney is the person to ask.