Yes. The deposit is credited back to the buyer on the settlement statement at closing, applied first against the down payment and then against closing costs, so it lowers the cash you wire on closing day dollar for dollar rather than adding to what the purchase costs.
The deposit feels like a separate payment, because it leaves your account weeks before closing, goes to a company you have never dealt with, and never comes back as anything you can see. It is not separate. Earnest money is an advance on cash you were always going to bring, parked with a neutral third party so the seller can see that you mean it, and the settlement statement hands it back to you as a credit on the day the sale closes.
The credit line on the settlement statement
Escrow holds the deposit in a trust account from the day it clears until closing. At closing the settlement statement lists the purchase price on one side and every credit against it on the other: the loan amount, the earnest money, any seller concession, any prorated tax or dues the seller owes you. What is left after the credits is the cash to close, the figure you wire. The deposit reduces that figure by exactly what it was.
Which bucket it lands in is an accounting question rather than a real one, since the down payment and the closing costs come out of the same wire. Lenders generally count it toward the down payment first, which matters only when the deposit is large enough to change how much of the down payment a buyer still has to document as their own seasoned funds. Anything left over once the down payment and the costs are covered is refunded after recording, usually within a few days.
How much, and who holds it here
One to three percent of the price is the common range nationally, and the same range holds in the Las Vegas valley: roughly $4,500 to $13,500 on a $450,000 home. Competitive offers go higher, sometimes to five percent, because a larger deposit is a credible signal of intent and it is a cheap one to send. It costs nothing extra to offer more if you close as agreed.
In Nevada the money goes to the title company, which is also the escrow holder, and never to the seller or the seller's agent. The contract sets the deadline, commonly one to three business days after acceptance, and escrow issues a receipt. Wire instructions that arrive by email and change at the last minute are the standard real estate fraud, which is why escrow confirms them by telephone before the money moves.
When it comes back, and when the seller keeps it
The contingencies are the exits. Cancel inside the inspection period, or under a live appraisal contingency after a low value, or under the financing contingency after a genuine loan denial, and the deposit is returned. Cancel after those windows have closed, or simply fail to close, and the deposit is what the seller is entitled to pursue.
Nevada's standard residential purchase agreement carries a liquidated damages provision. Where both parties initial it, the seller's remedy against a defaulting buyer is capped at the earnest money rather than open to whatever the default actually cost, which limits the buyer's exposure to the deposit and makes the deposit genuinely at risk rather than a formality. Escrow will not release the money to either side without written instructions signed by both, so a disputed cancellation sits in the trust account until the two agree or a court decides.
The arithmetic on a $450,000 purchase
- Price $450,000, a 10 percent down payment of $45,000, and a $405,000 loan.
- Earnest money of $9,000 (2 percent) wired to escrow three days after acceptance.
- Closing costs and prepaid items of roughly $12,000, so the buyer owes about $57,000 at closing.
- The settlement statement credits the $9,000 already on deposit, and the buyer wires about $48,000.
- Had the same buyer deposited $13,500 instead, the wire would be about $43,500. The total out of pocket is identical either way.
Questions people ask
Is earnest money refundable?
Inside a live contingency, yes: an inspection, appraisal or financing exit taken before its deadline returns the deposit in full. Outside one, the seller is generally entitled to it, and escrow releases the money only on cancellation instructions that both sides have signed.
Do you lose earnest money if the loan is denied?
Not where the financing contingency is still in place and the denial is genuine, which is the situation that contingency exists for. A buyer who removed it, or who caused the denial by changing jobs or opening credit during escrow, is in a weaker position and may be in default.
How much earnest money is normal?
One to three percent of the purchase price in most markets, deposited within a few days of acceptance. Competitive offers go higher. New construction builders set their own figure, often a flat few thousand dollars plus a percentage of the options selected, and their deposits are frequently non-refundable earlier.