What Is Earnest Money in Arizona?

Earnest money is the deposit a buyer submits with an accepted contract to show the offer is serious. In Arizona it is typically delivered to the escrow company — not to the seller — and it is held in a trust account until closing or until the contract ends.

How much is typical?

There is no fixed amount required by law. The figure is negotiated and is often expressed as a percentage of the purchase price. A stronger deposit can make an offer more competitive, but the amount should always be a number you are comfortable putting at risk under the contract terms.

When is earnest money at risk?

During the contract's contingency periods — inspection, appraisal, loan and others written into the agreement — a buyer who cancels according to those terms is generally entitled to a refund of the deposit. Once those contingencies have passed or been waived, cancelling can put the deposit at risk.

This is why deadlines matter so much. Every date in the contract is a real date, and missing one can quietly change your position.

What happens to it at closing?

The deposit is credited toward your down payment and closing costs. It is not an extra cost — it is money applied to the purchase.

Practical notes

• Follow the escrow company's wiring and verification instructions exactly, and confirm wire details by phone using a number you already have.
• Keep your receipt and the escrow number.
• Ask your agent to confirm in writing when the deposit was received.
• Track your contingency deadlines on a calendar, not from memory.