Earnest money deposit rules vary across all 50 states. Typical percentages range 1-3% of purchase price, but Massachusetts uses a $1,000 binder deposit at OTP, Vermont permits as low as $100, and Texas uses Option Fee separate from EMD. Escrow holder requirements, refund timing, and automation patterns inside.
Typical EMD Ranges by Region
West Coast (CA, WA, OR): 1-3% of purchase price. Mountain West (CO, UT, AZ): 1-2%. Texas: 1% EMD plus Option Fee ($100-$500). Southeast (FL, GA, NC, SC): 1-2%. Northeast: 1% in NY (small binder at contract; larger downpayment at closing); Massachusetts uses $1,000 binder at OTP plus 5% deposit at P&S. Midwest: 1-2%.
Who Holds Earnest Money?
Most states allow listing broker trust account, title company, or attorney escrow. NJ requires attorney trust. NY requires attorney escrow. CT and MA require attorney trust. Brokers holding EMD must maintain non-interest-bearing trust accounts with monthly reconciliation in nearly every state.
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Frequently Asked Questions
What is the typical earnest money deposit in 2026?
1-3% of purchase price in most US markets. Hot markets (CA, FL) sometimes push to 5%. Texas keeps EMD at 1% with a separate Option Fee. Vermont and NH permit nominal deposits as low as $100-$500.
Who holds the earnest money deposit?
Listing broker’s trust account, title company, or attorney trust account depending on state. Attorney states (NJ, NY, CT, MA, others) typically use attorney trust. Brokers in non-attorney states most commonly hold EMD in a non-interest-bearing trust account.
When does earnest money get refunded if a contract terminates?
Within the contract’s contingency window if termination is for a covered reason. After contingencies expire, EMD is at risk and refund typically requires mutual release or court order. Refund timing ranges 3 business days (most states) to 30 days (CT).
Can earnest money be automated for deadline tracking?
Yes. ReBillion’s deadline engine tracks EMD delivery against state-specific deadlines (3 business days CA, varies elsewhere) and alerts the TC and listing broker when delivery is late. Late EMD is one of the most common cure-or-terminate triggers.
What happens to EMD interest?
Most states require non-interest-bearing accounts. Where interest accrues (some attorney states, some IOLTA-style arrangements), interest typically goes to a state housing or legal-services fund per statute, not to buyer or seller.
Related reading: Best TC software 2026, AI transaction coordinator, TC checklist.
Written by Vikas Malpani
Vikas Malpani is the CEO and Co-Founder of ReBillion and a CAR-Certified Transaction Coordinator. A serial real estate technology entrepreneur with 15+ years across technology and real estate operations, he was named to MIT Technology Review's TR35 list of young innovators. At ReBillion he leads the AI systems that deliver compliant, accurate transaction coordination for brokerages and agents across all 50 US states. Connect with Vikas on LinkedIn: https://www.linkedin.com/in/vikasmalpani/
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