11/10/2026
Can you get your earnest money deposit back if a real estate deal falls apart in Michigan? Here is how escrow rules protect you.
When you make an offer on a home, you may write a significant earnest money deposit to show the seller you are serious. But what happens to that money if the transaction does not close? Many buyers worry their deposit is automatically forfeited, while sellers often believe they can keep the funds the moment a deal stumbles.
Under Michigan law, a broker must deposit earnest money into the brokerage's trust account within two banking days of a binding purchase agreement; many agreements name a title company as the escrow agent instead. Whether that deposit is refundable depends entirely on the contingencies written into your purchase agreement. If you terminate properly within your home inspection window, or if your lender issues a formal loan denial before your financing deadline, your earnest money is protected. If a buyer defaults without an active contractual contingency, the seller may be entitled to the funds as liquidated damages. And an escrow agent cannot release disputed funds without a signed release from both parties or a court order.
Having clear contingency dates and proactive communication ensures your hard earned deposit is never put at risk.
Preparing to buy or sell a home in western Wayne County? Comment DEPOSIT and I will send you my Michigan Earnest Money and Contract Protection Guide.
Mary Wolfe
REALTOR®
Certified Luxury Home Marketing Specialist (CLHMS)
Seniors Real Estate Specialist® (SRES®)
Real Estate with Preferred, Realtors Ltd
44644 Ann Arbor Road, Suite A · Plymouth, MI 48170
(734) 787-7092 · wolfeluxuryhomes.com
Serving Plymouth, Plymouth Township, Northville, Northville Township and Canton
Equal Housing Opportunity