A buyer has an accepted offer, inspections are beginning, and then a practical question becomes urgent: when is earnest money due? The short answer is that the purchase contract controls. In many transactions, the money is due shortly after acceptance of the offer, but the exact deadline, payment method, and consequences of missing it should all be written into the agreement.
For buyers, this is not a minor administrative step. Earnest money shows the seller that the buyer intends to follow through. For sellers, receiving it on time can provide reassurance while the home is off the market. A clear understanding of the deadline helps both sides avoid unnecessary stress after a successful negotiation.
What earnest money means in a home purchase
Earnest money is a good-faith payment made by a buyer after an offer is accepted. It is generally held in trust by a brokerage, attorney, title company, or other agreed-upon party until closing or until the contract is otherwise resolved. If the purchase closes, the amount is usually credited toward the buyer’s down payment or closing costs.
The terminology varies by market. In British Columbia, including Kelowna, purchase contracts more commonly refer to a deposit rather than earnest money. The purpose is similar: it demonstrates the buyer’s commitment and is held according to the terms of the contract. The label matters less than the wording in the signed agreement.
Earnest money is not the same as a down payment. The down payment is the buyer’s contribution toward the purchase price at closing. Earnest money may form part of that amount, but it is paid much earlier and is governed by the purchase contract’s deposit provisions.
When is earnest money due? Check the contract first
There is no single deadline that applies to every home sale. In a typical transaction, the offer will state a specific time period, such as within 24 hours of acceptance, within two business days, or by a particular date and time. Once the seller accepts and all parties have a binding agreement, that clock starts based on the contract language.
Some offers require the deposit to accompany the offer. This can strengthen an offer in a competitive situation, although the funds may not be delivered to the trust holder unless the offer is accepted. Other agreements call for payment after acceptance, giving the buyer a brief window to arrange a bank draft, wire transfer, certified check, or approved electronic transfer.
Do not rely on a verbal understanding of the deadline. Review the exact wording with your real estate professional before submitting an offer, especially if acceptance may occur in the evening, over a weekend, or just before a holiday. A deadline described in business days can work very differently from one described in calendar days.
Why the due date can differ
The earnest money deadline is negotiated along with the rest of the offer. A seller may prefer a quick deposit because it reduces uncertainty. A buyer may need a little more time if funds are moving from another account or if a financial institution requires notice for a large withdrawal.
Neither approach is automatically right. A very short deadline can make an offer more appealing, but only if the buyer can meet it without risk. A longer deadline may be reasonable, particularly where banking logistics are involved, but a seller may see it as less secure. The best timeline is one that is clear, achievable, and appropriate for the overall strength of the offer.
What happens after an offer is accepted
After acceptance, your agent should confirm four details: the deposit amount, the deadline, who will hold the funds, and the approved payment method. This is also the time to make sure the deposit receipt is issued and saved. A receipt provides a record that the obligation was met.
Buyers should avoid sending money based only on an emailed instruction that has not been independently verified. Real estate fraud often involves altered wire instructions or impersonated professionals. Confirm payment details by calling a known, verified phone number for the brokerage, lawyer, title company, or other deposit holder. Do not use a number included only in an unexpected message.
In a Kelowna-area transaction, the deposit is often delivered to the brokerage’s trust account according to the contract. The brokerage will provide the required instructions. Scott Smith Real Estate and Royal LePage Kelowna can help clients understand the contractual deadline and the proper next step, but buyers should also obtain legal advice when a contract issue requires it.
Can you get earnest money back?
Often, yes, but it depends on why the transaction does not close and what the contract says. A well-written offer may include conditions for financing, inspection, insurance, review of documents, or the sale of the buyer’s current home. If a condition is not satisfied or waived within the stated condition period, the buyer may be able to end the contract and have the deposit returned.
That outcome is not automatic. The condition must be written clearly, exercised properly, and delivered within the required timeline. For example, a buyer who cannot obtain financing should not simply assume that a phone call is enough. The agreement may require written notice before a specific deadline.
If a buyer removes conditions and later fails to complete the purchase without a contractual basis, the deposit may be at risk. A seller may seek to keep it, and depending on the circumstances, may have other legal remedies as well. If the seller fails to meet their obligations, the buyer may also have rights concerning the deposit. Disputes about deposit funds can require agreement between the parties or legal direction before a trust holder releases the money.
What if earnest money is paid late?
A late deposit does not always end a purchase, but it should be treated as a serious issue. Missing the deadline can put the buyer in breach of the contract. The seller may have options that include demanding compliance, negotiating a solution, or taking steps to end the agreement, depending on the contract and local law.
If there is any chance you will miss the deadline, tell your agent immediately. Early communication gives the parties a chance to discuss an extension before the deadline passes. An extension should be documented in writing and signed by the necessary parties. A casual text message or verbal assurance may not protect either side.
Buyers should not wait until the final hour to arrange funds. Bank holds, transfer limits, identity verification, and weekends can all create delays. If your deposit will come from investments, a gift, or proceeds from another sale, discuss the timing before you write the offer.
How much earnest money should you offer?
The amount is another negotiated term, not a fixed percentage that works for every property. Local custom, the home’s price, market competition, financing, and the number of conditions all influence the appropriate deposit. A larger deposit can signal confidence, but it also increases the amount at stake if the buyer defaults after conditions are removed.
For a first-time buyer, the goal is not simply to offer the largest possible amount. It is to make an offer that is credible while preserving enough liquidity for inspections, moving costs, closing expenses, and any repairs that arise after possession. For a seller, the focus should be on the overall offer, not the deposit alone. Price, conditions, financing strength, completion date, and the buyer’s ability to perform all matter.
Questions to ask before you submit an offer
Before signing, ask where the money will be held, exactly when it is due, and what form of payment is accepted. Ask how your conditions affect the return of the deposit and what written notice is required if a condition is not met. If any answer is unclear, get clarification before acceptance rather than trying to interpret the contract under pressure afterward.
A home purchase moves quickly once an offer is accepted, but the deposit deadline should never be a surprise. Have the funds accessible, understand the contract language, and keep written proof of every step. That preparation allows you to focus on the next decision with greater confidence.