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Earnest money is the first real dollar a buyer puts behind an offer. In Arizona it is a good-faith deposit made after the seller accepts, held by the escrow company or a broker’s trust account, and credited toward the buyer’s down payment or closing costs at closing. A buyer can get it back by canceling on time under a right the contract grants, such as the inspection period.
Kristi Patterson, REALTOR® with Iannelli & Associates Real Estate and the agent behind Prescott Realty Pros, walks buyers through earnest money on nearly every purchase. This guide explains how earnest money in Arizona usually works, drawing on the Arizona REALTORS® resale contract and the association’s published guidance.
What Earnest Money in Arizona Actually Is
Earnest money is a good-faith deposit a buyer makes after the seller accepts an offer. It is not an extra fee; it is part of the buyer’s own money in the deal.
- Read the earnest money amount and deadline in your contract before you sign.
- Confirm where the deposit will be held and how you will pay it.
- Keep a copy of the receipt from escrow or the broker’s trust account.
In the Arizona REALTORS® Residential Resale Real Estate Purchase Contract, earnest money is deposited with the escrow company or a broker’s trust account after acceptance. At closing, it is applied toward the buyer’s down payment or closing costs.
How Much Earnest Money to Offer
There is no single required amount. The right number depends on the price, the market and how competitive the home is.
- Ask your agent what is typical for similar homes right now.
- Make sure the deposit fits the cash you will still need at closing.
- Avoid promising more than you can deliver by the deadline.
A stronger deposit can make an offer look more committed, but it also puts more of your money at stake if you miss a contract deadline. Kristi’s earlier post on what contingent really means explains the deadlines that protect buyers during escrow.
When a Buyer Can Get Earnest Money Back
Whether a buyer gets the deposit back depends on the contract and the timing. Deadlines matter more than intentions.
- Track your inspection period and cancel in writing if you need to.
- Follow the contract’s steps if financing or the appraisal falls through.
- Never assume a verbal agreement protects your deposit.
The contract gives two common examples. If a buyer cancels during the inspection period with a signed notice that lists the items disapproved, the earnest money is released to the buyer. If the home appraises below the purchase price, the buyer has five days after notice of the appraised value to cancel and get the deposit back.
If buyer and seller disagree, the Arizona Association of REALTORS® notes that the escrow company may, but is not required to, release the earnest money; it can wait for mutual instructions or a court order.
What Happens in a Dispute
Disputes over earnest money are not common, but they do happen. Knowing the process ahead of time lowers the stress.
- Keep every notice and signed document in one folder.
- Talk with your agent before you send any cancellation notice.
- Ask an attorney about your specific situation if a dispute starts.
AAR’s buyer-seller dispute resources explain that the resale contract calls for mediation before most disputes go to litigation. That step can resolve many disagreements without a lawsuit.
A Closing Word From Kristi Patterson
Earnest money is simple once you know where it goes and which deadlines protect it. If you are planning a purchase in Prescott, Prescott Valley, Chino Valley or Dewey-Humboldt, Kristi is happy to walk you through your contract line by line. Call (928) 890-7023 or reach her through the Prescott Realty Pros contact page. For more local real estate coverage, see the Prescott Realty section of Bridge News.
Kristi Patterson, REALTOR®, Prescott Realty Pros | Brokerage: Iannelli & Associates Real Estate | prescottrealtypros.com | Equal Housing Opportunity. This article is general information, not legal advice. Your purchase contract, escrow officer and attorney have the final word on your transaction.
About the author
Kristi Patterson, REALTOR® (Arizona license SA698076000), moved to Prescott from Southern California in 2004 and helps buyers and sellers across Prescott, Prescott Valley, Chino Valley, Dewey-Humboldt, Paulden and Mayer. She works through Prescott Realty Pros with Iannelli & Associates Real Estate, a family-owned brokerage.
Citations and resource links
- Arizona Association of REALTORS®. “Buyer-Seller Disputes.” Arizona REALTORS®. n.d. Accessed October 29, 2026.
- Arizona Association of REALTORS®. “Escrow Company May, but Is Not Required to, Release the Earnest Money to a Party in the Event of a Dispute.” Arizona REALTORS®. November 18, 2022.
- Arizona Association of REALTORS®. “Residential Resale Real Estate Purchase Contract.” Arizona REALTORS®. February 2026.
- Patterson, Kristi. “What Does ‘Contingent’ Really Mean When Buying a Home?” Bridge News. September 8, 2026.
