Buying in Scottsdale comes with fast decisions and firm timelines. One detail that can feel confusing is earnest money, the good‑faith deposit you put down when your offer is accepted. You want to signal you are serious without putting your funds at unnecessary risk. In this quick guide, you will learn typical deposit amounts, key deadlines, and the exact protections that help you keep your money safe under Arizona contracts. Let’s dive in.
What earnest money is
Earnest money is a good‑faith deposit you agree to in the Arizona purchase contract. It shows the seller you are committed and ready to perform. If you close, the deposit is credited to your down payment or closing costs. If the deal ends, the contract controls whether the money is refunded or forfeited.
Typical amounts in Scottsdale
Scottsdale pricing often pushes deposits higher in dollar terms. While every deal is negotiated, these are common ranges:
- Entry and condo price points: about $1,000 to $5,000.
- Mid‑range single‑family homes: roughly $5,000 to $15,000, or around 1%.
- Higher‑end homes: several percent of price, often $20,000 or more.
For a $600,000 home, 1% equals $6,000 and 2% equals $12,000. In a multiple‑offer situation, you may raise the deposit or shorten contingency periods to stand out.
Who holds your deposit
Arizona practice is to place earnest money with the named title or escrow company, or a real estate broker’s trust account, as stated in the contract. The escrow holder follows the written instructions in the contract and any required releases. If there is a dispute, escrow will usually hold the funds until both sides agree in writing or a court order directs release.
Key delivery deadlines
Your purchase contract sets an exact delivery window for the deposit. Commonly this is 24 to 72 hours after contract acceptance, but the timeline is negotiable. Follow the deadline precisely. Late or missed delivery can be a breach. Keep a written receipt for your records.
Contingencies that protect you
Contingencies are your safety net. If you cancel within a valid contingency period and follow the contract’s notice steps, your earnest money is ordinarily refundable.
- Inspection period. You can inspect, request repairs, or cancel within the period stated in the contract.
- Financing contingency. You have a set number of days to secure a loan commitment. If financing fails and you terminate on time per the contract, you typically receive a refund.
- Appraisal contingency. If the appraisal is below the price and the contract allows termination, you can cancel within the deadline and protect your deposit.
- Title and HOA review. You may review title and HOA documents and cancel within the stated review window if unacceptable issues arise.
When deposits are refunded
Your earnest money is typically refunded if:
- You terminate within an active contingency period following contract notice rules.
- The seller materially breaches, such as failing to deliver clear title, as provided in the contract.
Refunds depend on exact wording and timely written notices. Keep all documentation.
When deposits can be forfeited
You may risk your deposit if:
- You miss deadlines or fail to deliver the deposit on time.
- You waive contingencies and later cannot close.
- You choose not to close after contingencies expire.
Many Arizona contracts include a liquidated damages clause that may allow the seller to keep the earnest money if you breach. If the seller claims damages beyond the deposit, they must pursue those under the contract and applicable law.
How to reduce your risk
Use a disciplined process from day one.
- Get lender preapproval and confirm your loan timeline before you write.
- Set clear contingency deadlines and track them on a calendar.
- Put all notices in writing and keep copies of every document and email.
- If financing or appraisal issues arise, act before the deadline and use the contract’s notice forms.
Safe ways to deliver funds
Wire fraud targeting real estate is real. Protect your deposit.
- Call the title company at a verified phone number to confirm wiring instructions.
- Do not rely on emailed wiring details without verbal verification.
- Ask about alternatives such as a cashier’s check if available.
- Get a written receipt and keep the transfer confirmation.
Strategy in competitive offers
In a hot segment of the Scottsdale market, sellers look for low‑risk buyers. You can strengthen your offer while still managing risk.
- Increase the deposit within your comfort level while keeping core contingencies.
- Tighten, but do not eliminate, your inspection or loan timelines unless you fully understand the risk.
- Pair stronger terms with a clear preapproval, proof of funds, and a clean, complete contract.
The bottom line for Scottsdale buyers
Your earnest money is governed by your Arizona purchase contract, the escrow instructions, and your performance on deadlines. Choose a deposit that fits the property and the level of competition. Protect it with the right contingencies, exact timing, and careful documentation. If a dispute arises, speak with your agent and, if needed, an attorney to understand your options.
Ready to plan your strategy for a Scottsdale home or estate? Connect with The Matchett Group for a private, step‑by‑step consultation tailored to your goals.
FAQs
What is earnest money in an Arizona home purchase?
- It is a good‑faith deposit written into your purchase contract, held by escrow or a broker trust account, and credited to you at closing if the deal completes.
How much earnest money is typical in Scottsdale?
- Amounts often range from $1,000 to $10,000 or about 1% to 3% of price, with higher deposits on luxury homes or in multiple‑offer situations.
Who holds my earnest money in Maricopa County?
- The contract names the escrow holder, usually a title or escrow company, or a broker trust account, which releases funds only under the contract’s instructions.
When is earnest money due after offer acceptance?
- Your contract sets the delivery window, commonly 24 to 72 hours after acceptance. Late delivery can be a breach.
How do contingencies protect my earnest deposit?
- If you cancel within an active contingency period, such as inspection, financing, appraisal, or title review, and you follow notice rules, your deposit is typically refundable.
What if my loan is denied before closing?
- If you have a financing contingency and you terminate on time per the contract, the deposit is usually refundable. If you waived the contingency, the funds may be at risk.
What happens if the seller defaults on the contract?
- If the seller materially breaches, you are typically entitled to an earnest money refund and may pursue other remedies as allowed by the contract.
