Mechanics and protection
On acceptance, your deposit goes to a neutral escrow holder and waits. Close normally and it becomes part of your funds at settlement. Terminate properly under a contingency — inspection, financing, appraisal, title — and it returns. The danger zone is walking away outside your contractual rights, where the deposit is the classic stake.
This is why contingency structure and deadlines are not paperwork trivia: they are the fence around your money. I watch those dates like they are my own deposit, because professionally they are.
Sizing as strategy
Right-sized earnest money is market- and situation-dependent: enough to signal seriousness for the property and competition, structured with your protections intact. In multiple-offer moments, deposit strength (and occasional staged increases) speaks; in quiet negotiations, standard sums serve.
Never confuse the deposit with the down payment — earnest money is simply the early-arriving part of funds you were bringing anyway, doing signaling work en route.
Local rule of thumb: Size the deposit for the message; guard it with the deadlines.