Acceptable Forms of Earnest Money (2026)

February 24, 2026 by Georges Benoliel

Home sellers typically accept earnest money in the form of personal checks, certified checks, ACH bank transfers, or wire transfers. Cash is generally not accepted because it’s difficult to track and record. Buyers have little incentive to use cash since proving payment can be challenging in disputes. As a result, wire transfers and personal checks are the most common methods for earnest money deposits.

For example, in New York, it’s common for the buyer’s attorney to include a personal check with the signed purchase contract, which the seller’s attorney deposits into escrow.

How to pay earnest money without a check

You’re not obligated to use a check for the earnest money deposit, even if it’s customary in certain states like New York. In New York, buyers can wire the earnest money directly to the seller’s attorney’s escrow account as soon as the fully signed contract is received.

If you choose to wire the earnest money, ensure you follow the deadlines specified in the contract. Missing the deadline by a day or two may sometimes be tolerated, depending on the seller. However, they might also have the right to cancel the contract if you’re late. Therefore, it’s best to adhere strictly to the contract terms.

What if I don’t have earnest money?

If you’re considering purchasing a home but lack sufficient funds for the earnest money deposit, it’s important to pause and carefully assess whether buying a home and securing a mortgage is the right decision for you.

Here are some common scenarios where this could happen, along with possible actions you might take in each case.

You have assets but no liquidity

You might have a substantial amount of assets, but due to their illiquid nature, you may not have much cash on hand for short-term liquidity. In this case, consider whether you can secure a loan against your assets and if the terms are suitable.

It’s advisable to consult with your financial and tax adviser to determine if an asset-backed loan could help cover your earnest money deposit and possibly the entire purchase price. If you decide to borrow against your illiquid assets for the earnest money, it’s important to plan how you’ll cover the remaining purchase balance and ongoing housing payments after closing.

Forms of Earnest Money: You plan on receiving a gift from family

You might not have enough money for an earnest money deposit because you’re expecting a cash gift from your family to assist with the purchase. If this is the case, you should wait until the gift arrives before submitting offers or signing contracts.

Signing a contract without the required deposit means the seller is unlikely to proceed with you, even if you secure the money later. Additionally, if the contract permits, the seller could pursue damages if you fail to provide the deposit on time.

You haven’t started your new job yet

Perhaps you are a student with a job offer, haven’t started earning yet, but will in the future, and will be able to cover your mortgage and other housing payments. These are all acceptable reasons why it may be prudent for you to purchase a home if you don’t have enough money to even cover the earnest money deposit.

However, if you don’t have money to cover the earnest money deposit because you don’t have any savings, don’t have a job, or aren’t making enough money to build up any savings, then it’s extremely imprudent for you to be taking on any housing-related obligations, such as a mortgage.

Getting a loan for the earnest money deposit

Getting a loan to cover your earnest money deposit is a bad idea. If you lack enough savings for your contract deposit, you probably also don’t have enough for the rest of the purchase price. This typically means you’ll need a bank’s mortgage commitment.

However, banks usually want their mortgage to be the most senior debt, meaning there should be no other loans ahead of theirs for repayment if you default. If they foreclose on the collateral, which is usually your home, they want to be first in line to recover the debt.

Therefore, lenders are unlikely to be willing to lend you money if they discover you’ve taken out a loan for the earnest money deposit. This is especially true if that loan is also secured by your home.

What if it’s an unsecured loan?

Even if your earnest money deposit loan is unsecured, like a credit card or personal loan not linked to collateral, mortgage lenders generally won’t be favorably inclined. The purpose of earnest money is to show you have “skin in the game.” Borrowing the earnest money deposit means you lack that stake, increasing lenders’ perceived risk of default.

Earnest money deposit assistance

You may qualify for assistance with your earnest money deposit if you meet low-income criteria or live in certain areas, making you eligible for various downpayment aid and first-time homebuyer programs.

If your mortgage amount is below conforming limits (as opposed to jumbo loans), you could also qualify for very low down payments, such as 3% or even 0% with VA loans.

Note that conforming mortgages often require mortgage insurance (PMI), which can add an extra cost that non-conforming loans might avoid.

It’s common for borrowers to receive gifts from family—often parents—to help cover part or all of the down payment. If you receive such a gift at least two months before applying for a mortgage, you can use part of it for your earnest money deposit.

Receiving the gift well in advance simplifies documentation, as banks typically require two months of bank statements to verify large transactions. If the gift is more than two months old, it won’t be seen or sourced by the bank. This approach saves administrative time and allows you to use gifted funds. This usually represents 10% of the contract price—toward your earnest money deposit.

Tags: Buying in NYC

Written By: Georges Benoliel

Georges has been working in Wall Street for the last 16 years trading derivatives with hedge funds. He has been an active real estate investor for over a decade. Georges graduated from HEC Business School in Paris and holds a master in Finance from ESADE Barcelona.

The Nest

NestApple's Real Estate Blog