Arizona buyer question
What is earnest money in Arizona and do I get it back if I cancel?
A plain-language look at the good-faith deposit in Arizona resale contracts, when it is refundable, and what happens if buyer and seller disagree.
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The short answer
Quick answer: Earnest money is a good-faith deposit held in escrow when your offer is accepted. Whether you get it back if you cancel depends on your purchase contract. Under the standard Arizona REALTORS® resale form, buyers who cancel under allowed contingencies, such as during the inspection period, are generally entitled to the deposit; a breach can put it at risk.
Source: Arizona REALTORS®, Residential Resale Real Estate Purchase Contract (August 2024 form) and Arizona Department of Real Estate, Buyer Advisory (January 2025). Last updated .
What is earnest money?
Earnest money is a deposit that shows the seller you are serious about buying. In Arizona resale transactions that use the Arizona REALTORS® Residential Resale Real Estate Purchase Contract, the contract states the amount, the form (for example personal check or wire), and whether it is deposited with the escrow company or a broker's trust account after acceptance.
If the sale closes, earnest money is usually credited toward your cash to close. It is not an extra fee on top of the purchase price.
Do I get earnest money back if I cancel?
It depends on why and when you cancel, and on the exact wording of your signed contract. Under the standard Arizona REALTORS® resale form:
- Inspection period. By default the contract gives buyers a 10-day inspection period after acceptance (unless a different number is written in). Buyers who disapprove items and cancel under the contract's inspection provisions are generally entitled to a return of earnest money. Arizona REALTORS® guidance also notes that if the seller is unwilling or unable to correct or address disapproved items, the buyer may cancel within five days after the seller's response (or after the time for a response expires) and the earnest money is released to the buyer.
- Other contingencies. Loan, appraisal, and other contingencies written into the contract can also allow a cancellation with return of the deposit when their conditions are not met. An unfulfilled contingency is not the same as a breach.
- Breach. If a party fails to perform and does not cure after a cure notice, the non-breaching party may cancel. A buyer breach can put the earnest money at risk for the seller as a remedy under the contract. The Arizona Department of Real Estate's Buyer Advisory warns that waiving contingencies can put your earnest money at risk.
Your signed contract controls. Forms are updated over time; read the version you signed, and ask your agent or an Arizona real estate attorney about your situation.
Create your free account to see all homes for sale that fit the monthly payment you're comfortable with, each with its actual property taxes, HOA dues, estimated homeowners insurance, and mortgage insurance when it applies, plus its own estimated closing costs and APR disclosure.
Opens a third-party home search site. Payments shown there are estimates to help you search, not a loan offer or rate quote. Your actual payment depends on price, down payment, credit, taxes, insurance, HOA, and loan program.
What if buyer and seller disagree about the deposit?
The standard contract has rules for releasing earnest money and for disputes. Escrow generally needs written instructions both parties agree to, or another authorized basis, before releasing funds. Many Arizona contracts require mediation of disputes arising out of the purchase contract. If the parties still disagree, the escrow holder may need further process before the money moves.
How does earnest money fit my savings plan?
Earnest money is part of the cash you need early in the deal, but it is usually applied to your down payment and closing costs at closing if you buy. Budget for it alongside inspection costs and the rest of cash to close. See how much money to have saved and how long closing takes in Arizona.
More: what you need to buy · first-time buyers · all buyer questions
This page is general information, not legal advice. Your purchase contract, escrow officer, agent, or an Arizona attorney can answer questions about your deposit.
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Create your free account to see all homes for sale that fit the monthly payment you're comfortable with, each with its actual property taxes, HOA dues, estimated homeowners insurance, and mortgage insurance when it applies, plus its own estimated closing costs and APR disclosure.
Opens a third-party home search site. Payments shown there are estimates to help you search, not a loan offer or rate quote. Your actual payment depends on price, down payment, credit, taxes, insurance, HOA, and loan program.
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Sources
- Arizona REALTORS®, Residential Resale Real Estate Purchase Contract (August 2024 form; inspection period section)
- Arizona Department of Real Estate and Arizona REALTORS®, Buyer Advisory (updated January 2025)
- Arizona Department of Real Estate, Property Buyer's Checklist
- Arizona Department of Insurance and Financial Institutions, Financial Enterprises licensing (escrow agents)
- Consumer Financial Protection Bureau, Mortgage closing scams: how to protect yourself and your closing funds
Frequently asked questions
Who holds earnest money in Arizona?
Usually the escrow company named in the purchase contract, or sometimes a broker's trust account, as the contract specifies.
Is earnest money the same as a down payment?
No. Earnest money is a good-faith deposit during escrow. If you close, it is typically credited toward your cash to close (down payment and closing costs).
Can I get my earnest money back after a bad inspection?
Often yes, if you cancel under the contract's inspection provisions within the allowed time and follow the notice rules. Read your signed contract and the Buyer's Inspection Notice and Seller's Response (BINSR) process.
What if I waive the inspection contingency?
ADRE's Buyer Advisory warns that waiving contingencies can put your earnest money at risk. Talk with your agent before waiving protections.
What happens if the seller and I both claim the deposit?
Escrow generally will not release disputed funds without agreed written instructions or another authorized process. Many Arizona contracts require mediation of purchase-contract disputes.
How much earnest money do Arizona buyers put down?
The amount is negotiated in the offer and written into the contract. There is no single statewide required amount on this page.