Is Earnest Money Refundable in Arizona?
Earnest money in Arizona is refundable if you cancel inside a right the contract gives you: the inspection period, a low appraisal, or a loan that falls through. Miss a deadline and the seller can keep it. Forward Loans (NMLS #2006640) walks first-time buyers through each date.
We’re a mortgage brokerage in Phoenix. The loan side of your purchase contract has its own deadlines, and those are the ones we work through with you, subject to full underwriting. This page is part of our Arizona first-time homebuyer guide.
Last updated November 2026.
Built for
- First-time buyers writing an offer
- Buyers with an accepted offer
- Buyers who want to know what's at risk
On this page
- What does the Arizona contract say about earnest money?
- How much earnest money do you need in Arizona?
- When do you get your earnest money back?
- When can the seller keep your earnest money?
- How does your loan protect your earnest money?
- Does earnest money count toward your cash to close?
- How do you protect your earnest money from day one?
- FAQs: earnest money in Arizona
What does the Arizona contract say about earnest money?
If your offer is written on the Arizona Association of REALTORS® (AAR) Residential Resale Real Estate Purchase Contract, the February 2026 version leaves the amount blank, has the money deposited when your offer is accepted, and sets the deadlines that decide whether you get it back.
| Item | What the February 2026 AAR contract says | Section |
|---|---|---|
| Amount | You write it into your offer. The form sets no amount. | 1 |
| How you pay | Personal check, wire transfer, or another method you write in | 1 |
| Where it goes | Deposited on acceptance with the escrow company or a broker’s trust account | 1 |
| Inspection period | 10 days after acceptance, unless your contract sets another number | 6 |
| Repair requests | Seller has 5 days to answer. If the answer is no, you have 5 days to cancel | 6 |
| Low appraisal | 5 days after notice of the appraised value to cancel | 2 |
| Loan status update | Your lender’s update on your loan, due to the seller within 10 days after acceptance | 2 |
| Loan falls through | Notice no later than 3 days before the close of escrow date | 2 |
| Cure period | 3 days after a notice that a party hasn’t complied | 7 |
| Buyer breach | Seller may keep the earnest money as its damages | 7 |
Sources checked October 19, 2026. Your signed contract controls. Read it with your agent.
How much earnest money do you need in Arizona?
Arizona has no required amount. The AAR contract leaves a blank, and you and your agent set the number in your offer. A bigger deposit can make an offer look stronger to a seller. It’s also more of your money on the line if you miss a date.
Your loan doesn’t set the amount, but it does check where the money came from. FHA has the lender verify the source when the deposit is more than 1% of the price or out of line with your savings. Fannie Mae has lenders verify it when the deposit counts toward your required contribution.
Pay it from your own account and keep the paper trail. If family is helping, tell your loan officer before you write the check. Gift rules apply to the deposit too.
When do you get your earnest money back?
You get earnest money back when you cancel for a reason the contract allows and you give written notice on time. Under the AAR contract that covers four exits: the inspection period, a seller who won’t fix what you asked for, a low appraisal, and a loan that falls through.
- Inspection period. Within 10 days of acceptance, unless your contract says otherwise, cancel with a signed notice that lists the items you disapprove. Leave the items off and the seller can send a cure notice. Miss the 3-day fix and the seller may keep the deposit.
- The seller says no to repairs. If you ask for repairs and the seller refuses or doesn’t answer within 5 days, you have 5 days to cancel and get the deposit back.
- Low appraisal. If the home appraises below the price, you have 5 days after notice of the appraised value to cancel. Let that pass and the appraisal contingency is waived.
- Your loan falls through. If your loan doesn’t come together after a good-faith effort, you give notice no later than 3 days before the close of escrow date.
Verbal conversations don’t extend any of these dates. The contract says only a written agreement signed by both sides does.
When can the seller keep your earnest money?
The seller can keep your earnest money when you breach the contract. A missed notice starts as non-compliance. The seller sends a cure notice and you get 3 days to fix it. If you don’t, it’s a breach, and the seller may keep the deposit as its damages.
Three spots catch buyers:
- Letting the inspection period run out. Say nothing by the deadline and the contract treats it as your choice to move forward.
- Not bringing your closing funds. Missing them at close of escrow, after a cure notice, puts the deposit at risk.
- A loan problem the contract doesn’t cover. If the loan falls through because your rate and points were never set in a written agreement with the lender, or because you came up short on cash to close, the loan contingency doesn’t apply.
How does your loan protect your earnest money?
Two lender dates sit inside the AAR contract. The loan status update is due within 10 days after acceptance, and notice that your loan won’t close is due no later than 3 days before the close of escrow date. Both depend on a loan officer who moves fast and tells you early.
The loan status update tells the seller where your file stands. A quiet lender, a missing document, or bad news that shows up late can push you past the notice date. Then a loan problem turns into a deposit problem.
Does earnest money count toward your cash to close?
Yes. Earnest money isn’t money on top of your down payment and closing costs. You pay it early, escrow holds it, and it’s credited back to you on your final numbers at closing.
The full breakdown is on our page on how much money you need to buy a house in Arizona. For the rest of the cash, see down payment minimums in Arizona and closing costs in Arizona.
How do you protect your earnest money from day one?
Most of the protection is dates and paper. Here’s the order.
- Get a pre-qualification estimate before you write the offer. You see the loan side before your deposit is on the line.
- Set the amount with your agent. Know what it would cost you if a deadline slipped.
- Confirm wiring instructions by phone. Call the escrow company at a number you looked up yourself, not one from an email.
- Put every deadline on your calendar the day your offer is accepted. Inspection, repair response, appraisal, loan status update, loan notice.
- Send your lender what they ask for the same day. The loan status update is due within 10 days.
What do you bring to the first call? Recent pay stubs, W-2s or tax returns, recent bank statements, and a photo ID. Your loan officer tells you the exact list for your file.
FAQs: earnest money in Arizona
Is earnest money refundable in Arizona?
Yes, when you cancel for a reason the purchase contract allows and give written notice on time. Under the AAR contract that includes the inspection period, a seller who won’t make requested repairs, a low appraisal, and a loan that falls through.
How much earnest money do I need in Arizona?
Arizona has no required amount. The AAR contract leaves a blank, and you and your agent set the number in your offer. Your lender may verify where the money came from.
Who holds earnest money in Arizona?
Under the AAR contract, it’s deposited when your offer is accepted, with the escrow company or a broker’s trust account, whichever the contract names. It stays there until closing or cancellation.
Can I get my earnest money back if my loan falls through?
Under the AAR contract, yes, if you made a good-faith effort and give notice no later than three days before the close of escrow date. Not having the cash to close, or never setting your rate in a written agreement with the lender, doesn’t count.
Can I get my earnest money back if the appraisal is low?
Under the AAR contract, you have five days after notice of the appraised value to cancel and get it back. After that, the appraisal contingency is waived.
Can earnest money come from a gift?
Often, yes. Gift rules apply to the deposit like they do to the down payment, so tell your loan officer before you write the check.
Which contract version does this page use?
The February 2026 AAR Residential Resale Real Estate Purchase Contract, checked October 19, 2026. Forms change and your signed contract controls, so confirm your dates with your agent and your loan officer.
About the author
Michael Creel, Founder, Forward Loans. NMLS #420674.
Michael Creel founded Forward Loans in 2020 after 20-plus years in mortgage, marketing, and real estate. He is based in Phoenix and personally licensed to originate loans in Arizona, California, Colorado, and Texas (NMLS #420674).
His focus is building a brokerage that feels different from a traditional lender. Forward Loans is set up so clients get real options from multiple investors, straight answers from people who know their file, and clear communication through closing. The company serves homebuyers and homeowners across eight states.
Michael leads day-to-day operations and the marketing side of the business. He spends most of his time on strategy, team development, and how Forward shows up publicly through its content, brand, and Realtor partnerships.
About this guide
Last updated November 2026. Program terms, credit requirements, and assistance program limits change, and the figures referenced here should be confirmed with your loan officer or the program’s current materials before you rely on them. This page is education, not a commitment to lend. All loans are subject to full underwriting and property eligibility.
Forward Loans is licensed as both a mortgage broker and a non-delegated correspondent mortgage lender. Depending on the loan program, we either arrange financing through wholesale lenders, or originate and fund the loan ourselves and sell it to an investor that provides the underwriting decision.
About the contract terms on this page
This page summarizes the public sample of the AAR Residential Resale Real Estate Purchase Contract (February 2026). It is not legal advice, and Forward Loans is not a party to your purchase contract. Your signed contract and any addenda control. Your agent can walk you through your dates, and a real estate attorney can answer legal questions about your contract.
Related Arizona homebuyer guides
- How to buy your first house in Arizona
- How much money you need to buy a house in Arizona
- Down payment minimums in Arizona
- Closing costs in Arizona
- Arizona down payment assistance
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