Earnest Money

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Earnest money is a deposit — typically a small part of the purchase price — made by a buyer as evidence of good faith when entering a real estate contract. It is usually held in escrow and applied toward the purchase at closing.

In Idaho, earnest money is commonly deposited with the title/escrow company and held in escrow until closing.

Earnest money signals that a buyer is serious. Held safely in escrow, it is credited toward the buyer's costs at closing or handled according to the contract's contingencies if the sale does not close. Using a neutral title/escrow company to hold and transfer earnest money protects both buyer and seller.

• Escrow
• Closing
• Contract

Reviewed by Kootenai Title & Bonner Title Editorial Team · Last updated June 19, 2026
This definition is educational and not legal advice. See our Editorial Policy.