Earnest money: where your deposit lives and when it's at risk

The basics

Your deposit — commonly 1–2% locally, negotiable — is held in escrow, typically by the listing broker or title company, never handed to the seller directly. It isn't an extra cost: at settlement it credits toward your cash to close. Its job in between is to make your signature mean something.

When it's protected, and when it isn't

Terminate within a contingency you elected — inspection window, failed mortgage commitment, low appraisal under a financing contingency — and the deposit returns to you. Walk away outside those protections and the agreement's default terms decide, which usually means the seller has a claim to it. In a disputed termination, PA brokers generally can't release escrow until both parties agree in writing — a slow process that is itself a reason to terminate cleanly and by the book.

Bigger deposit = stronger offer?