Putting money on the line before you even get the keys can feel risky. If you are buying in Las Vegas or greater Clark County, you will hear about earnest money early in the process. The good news is you can protect that deposit with the right terms, timing, and documentation. In this guide, you will learn how earnest money works locally, typical amounts, when it is refundable, and smart steps to safeguard it. Let’s dive in.
What earnest money means in Las Vegas
Earnest money is a good-faith deposit you deliver after the seller accepts your offer. It shows you are serious and gives the seller some protection if you default. In most Las Vegas area transactions, the deposit is placed with a neutral escrow or title company and later applied to your down payment or closing costs per the contract.
In Nevada, what happens to your earnest money is controlled by your purchase agreement and the escrow instructions. State rules govern how trust accounts are handled, but your rights to a refund or the seller’s right to keep the funds will come from the contract language and contingencies you agree to.
How much to expect
There is no fixed required amount in Clark County. Local practice varies by price point, property type, and market conditions.
- For lower-priced or starter homes, deposits are often several hundred to a few thousand dollars.
- For mid-price and higher-value homes, deposits are commonly several thousand dollars and can be a percentage of the price.
- In competitive situations, buyers sometimes increase the deposit to signal commitment.
New construction often uses staged deposits with an initial amount at contract and additional deposits at set milestones. Exact amounts and timing change with the market and neighborhood. Use these as examples, not rules, and ask your agent for current local norms before you write an offer.
When earnest money is refundable
Earnest money is refundable only as your contract allows. Buyer protections are built into the agreement as contingencies. If you cancel within an allowed window, you can usually recover the funds.
Inspection contingency
If you complete inspections and cancel within the inspection period set in your contract, your deposit is typically refundable. This can include home, roof, pest, or other inspections as outlined in the agreement.
Financing contingency
If you apply for your loan and cannot obtain approval within the timeframe in the contract, you may be able to cancel and keep your deposit. Make sure you understand the exact financing deadlines and what proof your lender must provide.
Appraisal contingency
If the appraisal comes in below the purchase price and you and the seller cannot agree on a solution, an appraisal contingency can allow you to cancel with a refund. Without an appraisal clause, you may be obligated to proceed or risk your deposit.
Title and HOA review
If title review reveals an issue, or HOA documents show material concerns such as special assessments, your contract may let you cancel during the review window and receive a refund. Watch the clock. These review periods are time sensitive.
Other negotiated terms
You might include a contingency for the sale of your current home or other conditions. If the condition is not met within the stated period, your deposit can be refundable as the contract permits.
When your deposit may be at risk
Your earnest money can be at risk if you cancel after removing contingencies or after deadlines expire. If you default for a reason not covered by your contract, the seller may be allowed to keep the deposit as liquidated damages. Some agreements spell this out clearly.
If you and the seller disagree, the escrow or title company will usually hold the funds until you both sign a mutual release or a final decision is reached through the contract’s dispute process. Many Nevada purchase agreements include mediation or arbitration language, and escrow follows written instructions for disbursing contested funds.
Key timelines to track
Your contract will list exact dates and deadlines. Read the clause labeled Earnest Money or Deposit to confirm where and when the funds must be delivered.
- Deposit deadline. Local practice often calls for deposit within a few business days after acceptance. Your contract controls the exact due date and the recipient.
- Inspection period. Complete inspections and make your election to proceed, negotiate, or cancel within this window.
- Financing and appraisal. Track your loan milestones and the appraisal deadline if it is a separate item.
- HOA and title review. If applicable, review and respond within the stated period.
- Closing date and extensions. Know your closing date and any extension options.
Ask your agent to help you calendar every deadline in writing. Always get a written escrow receipt showing your deposit was received on time.
Local considerations in Clark County
Condos and HOAs. Condo and townhome purchases often include a resale packet review. If the documents reveal issues, you may have a contract right to cancel within that window and reclaim your deposit.
New construction. Builder contracts often require larger initial deposits and additional deposits tied to construction milestones. Some builder fees or option deposits may be nonrefundable. Read the builder agreement and addenda closely.
Title and escrow practices. Title companies in Clark County hold funds in trust and release money only per written instructions or settlement statements.
Wire fraud alert. Wire fraud is a real risk. Before sending any wire, verify instructions by calling the title company using a trusted phone number, not the number in an email. Do not rely on emailed changes to wiring instructions.
Real-world examples
Example 1: Inspection cancellation with refund
You offer a $3,000 deposit and a 10-day inspection period. The inspection uncovers a major foundation issue. You cancel within the inspection window. Per your contract, your deposit is refunded.
Example 2: Contingencies waived, financing fails
You waive inspection and financing to be competitive and deposit $5,000. Your loan later falls through and you fail to close. Since you removed protections, the seller may keep your deposit, subject to your contract.
Example 3: Appraisal comes in low
You include an appraisal contingency. The appraisal is below the contract price. You and the seller try to renegotiate or you bring more cash. If you cannot agree and cancel within the appraisal clause timeline, your deposit is refunded.
Example 4: Dispute over release
You believe the deposit is refundable. The seller claims you defaulted. The escrow company holds the funds until there is a mutual written release or a decision through mediation, arbitration, or court per the contract.
Smart steps to protect your deposit
Before you write the offer
- Ask your agent for current local norms on deposit size and timing for your price point and neighborhood.
- Decide how much you are willing to risk if you choose to shorten or waive contingencies in a competitive situation.
At contract execution
- Confirm the deposit amount, who holds it, and the exact due date in the contract.
- Deliver the funds on time and get a written escrow receipt.
During the transaction
- Track every contingency deadline and respond in writing within the window.
- Avoid removing contingencies unless you fully understand the risk and have a backup plan.
- Verify any wire instructions by phone with your title company using a trusted number.
If issues arise
- Contact your agent and your escrow officer immediately.
- Review the contract’s dispute resolution clause if there is a disagreement about release of funds.
- Consider mediation or legal counsel if the deposit is contested.
The contract is your guide
In Nevada, the Residential Purchase Agreement and any addenda control deposit deadlines, refund rights, and remedies. Your escrow instructions also matter. When in doubt, read the exact language and ask your agent to walk you through each date and clause. A few minutes of review now can protect thousands of dollars later.
Ready for local guidance?
You do not have to navigate earnest money alone. If you want clear answers for your price range, property type, and neighborhood in Las Vegas or Henderson, reach out. With 23+ years of local experience and hundreds of closings, Tracy Drown can help you structure a smart offer, track deadlines, and protect your deposit. Schedule a Free Consultation.
FAQs
How much earnest money should I offer in Las Vegas?
- There is no fixed rule. Starter homes often use a modest fixed dollar amount, while higher-priced or competitive offers use larger deposits or a percentage. Ask your agent for current local norms and balance competitiveness with how much you can afford to risk.
Is earnest money refundable if the appraisal is low?
- Only if your contract includes an appraisal contingency or similar language that allows cancellation for that reason. Without it, you may need to proceed or risk losing the deposit.
Who holds the earnest money in Clark County?
- Usually a neutral escrow or title company, or a broker trust account, as specified in your contract.
How fast do I need to deposit earnest money?
- Your contract sets the deadline. Local practice often requires deposit within a few business days after acceptance. Confirm the exact number of days in your agreement.
Can a seller keep my earnest money if I cannot close?
- Yes, if you default under the contract, such as removing contingencies then failing to close, and the agreement allows the seller to retain the deposit as damages.
What happens to earnest money at closing?
- At closing, the deposit is applied to your down payment or closing costs and disbursed by escrow according to the settlement statement.
