Earnest money in Maryland: how much, where, when back.

The check (or wire) you send with your offer signals you're serious. Here's how Maryland law and the standard MAR contract handle it, plus the contingencies that protect your right to get it back.

1. What earnest money is for

Earnest money — also called the earnest money deposit (EMD) or the binder — is the buyer's good-faith deposit submitted with an offer. It demonstrates financial commitment to the seller. If the deal closes, the EMD is credited to your funds at settlement (it goes toward your down payment or closing costs). If you back out without a valid contingency, the seller can keep it.

2. How much to put down

Maryland custom typically runs 1% to 3% of the purchase price, though it can range from a few hundred dollars on lower-priced homes up to several thousand or more on competitive listings [1][2]. There is no legal minimum or maximum — it's a negotiated term of the offer.

Practical rules of thumb in Central Maryland:

• Slower market / longer days on market: 1% is often sufficient.
• Median market: 1–2% is the norm.
• Competitive listings, multiple-offer situations: 2–3% (or more) signals seriousness alongside a strong offer price.

3. Where the money goes

The EMD does not go to the seller. It is held in a neutral escrow account — typically maintained by the listing brokerage, the title/settlement company, or in some cases a Maryland real-estate attorney [1][2].

Maryland law requires escrow holders (including title companies and attorneys) to have a written escrow agreement with the buyer and seller. That agreement must include [3]:

• The amount of trust money delivered and the date.
• Notification rules if the funds are returned for a dishonored payment.
• The conditions under which the escrow agent may release the funds.
• The process to address disputes over the release of the deposit.

Maryland REALTORS® and the Maryland Land Title Association publish a current Escrow Agreement form that complies with the statute [3]. If you're handed a contract that doesn't reference an escrow agreement, ask your agent or attorney before signing.

4. Timing rules

Maryland regulation (MREC) and the standard contract require that earnest money be placed in escrow within seven business days of contract formation (i.e., ratification of the offer) [3][4]. Some contracts call for delivery within 24 or 48 hours — read the specific paragraph in your contract.

Common delivery methods: cashier's check, personal check (verify acceptable), or wire transfer. Wire fraud is a real risk: always verbally verify wire instructions by calling the escrow agent at a number you independently look up (not one in an email).

5. Contingencies that protect your deposit

The standard Maryland REALTORS® contract includes several contingencies that, if properly invoked, allow the buyer to terminate and recover the EMD. The most common:

• Financing contingency. The deal is contingent on the buyer obtaining the specified loan. If the lender denies after a good-faith application, the EMD returns to the buyer.
• Appraisal contingency. Allows the buyer to renegotiate or terminate if the property appraises for less than the contract price.
• Inspection contingency. Allows the buyer to negotiate repairs, terminate, or both, based on findings within a specified inspection window.
• Sale of existing home contingency. Less common; protects buyers whose purchase depends on selling another property first.
• Title contingency. If the title search reveals defects the seller cannot cure, the buyer can terminate.
• HOA / condo document review. A specific Maryland-statutory right (typically a 7-day review window) to terminate after receiving HOA or condo documents.

Each contingency has a strict timeline. Missing a deadline can waive the protection — calendar every contingency date the day you ratify.

6. Disputes and release of deposit

If buyer and seller disagree about who gets the EMD after a contract terminates, the escrow holder cannot unilaterally release the funds [3][4]. Maryland's process — outlined by MREC's guidance on Return of Deposit — typically requires:

• Both parties signing a release-of-deposit form.
• Failing that, the escrow holder may interplead the funds with the court, or follow a statutory notice-and-objection procedure depending on the type of escrow holder.

Most EMD disputes resolve through release forms within a few weeks. Litigation is rare but possible; Maryland House Bill 1109 (passed in recent sessions) clarified some return-of-deposit procedures for residential contracts [5].

For specifics on your transaction, MREC publishes a dedicated guide on the return-of-deposit process [4], and a Maryland real-estate attorney can advise on contested cases.

This guide is general information for Maryland real estate consumers and is not legal advice. Earnest money and contingency law is complex and fact-specific; consult a licensed Maryland real estate attorney before relying on this content in any transaction or dispute. Evan Kundrat is a Maryland-licensed real estate salesperson (Lic. #5003434) at Keller Williams Flagship of Maryland (Designated Broker: Barry Hess, Lic. #517943). Equal Housing Opportunity.

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