Earnest Money Deposits in NJ: Who Holds Them and When They're Due
The short answer: Earnest money (also called a good faith deposit) is money a buyer puts up to show they're serious about an offer. In New Jersey, it can be held by the broker in a separate trust account, or by another person or entity legally allowed to hold escrow funds, such as a lawyer or a bank (N.J.A.C. 11:5-5.2(c), as amended Jan 20, 2026). A broker who receives it must deposit it within 5 business days (N.J.A.C. 11:5-5.1(e)).
How much the deposit is, when it's due and when it's returned are set by the contract, not by the licensing rules.
Who can hold a buyer's deposit in NJ?
The licensing rules allow funds placed in escrow to be held by "the broker themself, lawyers, or banks," or anyone else legally authorized to hold funds that way (N.J.A.C. 11:5-5.2(c)). The contract names the escrow holder.
When a broker holds it, the money goes into a special account kept separate from the broker's business and personal accounts (N.J.A.C. 11:5-5.1(a)). Only certain people can sign on that account:
| Role | Signatory on the trust account? |
|---|---|
| Broker of record or sole proprietor broker | Must be a signatory |
| Licensed broker-salesperson or salesperson | May be added |
| Unlicensed staff | No |
Source: N.J.A.C. 11:5-5.1(h).
How fast does a broker have to deposit it?
"Promptly," which the rule defines as no more than five business days after receiving the money (N.J.A.C. 11:5-5.1(e)).
There's one narrow exception. If, within those five business days, the offer is withdrawn before it's accepted, or rejected with no counteroffer, the licensee doesn't have to deposit the funds. They may return them to the buyer, on request, in the same form they came in.
In every other case, the money goes in within five business days. The rule gives examples: while negotiations are ongoing, while a contract is in attorney review, or when a buyer whose offer was rejected asks the licensee to hold the money for another offer.
What forms of payment can a broker accept?
| Form | Allowed? |
|---|---|
| Cash | Yes |
| Check or other negotiable instrument payable to the broker's firm | Yes |
| Check (debit) card charge credited to the trust account | Yes |
| Wire transfer straight from the payer's account to the trust account | Yes |
| Credit card | Only for short-term rentals (125 consecutive days or less) |
Source: N.J.A.C. 11:5-5.1(i). So a buyer can't put a home purchase deposit on a credit card with the broker. Every payment is recorded in the broker's trust account ledger.
What counts as commingling?
Commingling is a ground for discipline under N.J.S.A. 45:15-17(o). The rules list three ways it happens (N.J.A.C. 11:5-5.1(c)):
- Mixing clients' money with the licensee's own.
- Not promptly depositing money held for others in a separate trust account.
- Not promptly separating money received for others.
Keeping a small, clearly nominal amount of the broker's own money in the account to keep it open or cover bank charges isn't commingling (N.J.A.C. 11:5-5.1(f)).
What if there's reason to doubt the seller?
The 2026 amendments kept a safeguard rule. A licensee can't accept a deposit without making sure there are adequate precautions, such as escrow, if they know of facts that raise a reasonable doubt about the seller's ability to perform the contract or return the money if a contingency fails (N.J.A.C. 11:5-5.2(a)).
The exception: the licensee told the buyer about the known risks, and the buyer signed a separate writing acknowledging the risk, where the funds will go and that the licensee has made no representations about the seller's solvency (N.J.A.C. 11:5-5.2(b)).
What happens to the deposit at closing or if the deal ends?
At closing, the deposit is credited to the buyer. On the Closing Disclosure, Cash to Close is figured after subtracting the loan amount, the deposit already paid and any credits (CFPB). Our closing cost vocabulary guide explains that page.
If the deal ends, the contract decides who gets the money. Our contingencies guide covers how cancellation clauses usually handle it. Whatever happens, a brokerage acting as an agent must give its principal a timely accounting of money received from any party (P.L.2024, c.32, s.2.g), and failing to account for or pay over money belonging to others is a ground for discipline (N.J.S.A. 45:15-17(d)).
If the buyer and seller disagree, an agent shouldn't decide who's right. A licensee has a duty to recommend legal counsel whenever a party's interests seem to require it (N.J.A.C. 11:5-6.4(i)).
For more key terms, see the NJ real estate glossary. Trust account rules also show up on the state exam, and Business Elementary's 75-hour pre-licensing course covers the NJ licensing law behind them.
Sources
- N.J.A.C. 11:5-5.1 (not amended in 2026; via Cornell LII): https://www.law.cornell.edu/regulations/new-jersey/N-J-A-C-11-5-5-1
- N.J.A.C. 11:5-5.2, as amended by R.2026 d.020, effective Jan 20, 2026: https://www.nj.gov/dobi/proposed/aa260120njac11_5.pdf
- N.J.A.C. 11:5-6.4 (not amended in 2026; via Cornell LII): https://www.law.cornell.edu/regulations/new-jersey/N-J-A-C-11-5-6-4
- N.J.S.A. 45:15-17 (via Justia): https://law.justia.com/codes/new-jersey/title-45/section-45-15-17/
- P.L.2024, c.32: https://pub.njleg.state.nj.us/Bills/2024/PL24/32_.PDF
- CFPB, Closing Disclosure explainer: https://www.consumerfinance.gov/owning-a-home/closing-disclosure/
Last reviewed: October 30, 2026
Frequently Asked Questions
Is there a minimum earnest money deposit in New Jersey?
Not in the licensing rules we reviewed. The amount and due dates are set in the contract between buyer and seller.
Can a salesperson keep the deposit check until closing?
No. Money received for others has to be deposited in the broker's trust account within five business days, unless the narrow withdrawn-or-rejected-offer exception applies (N.J.A.C. 11:5-5.1(e)).
Can the broker's commission come out of the deposit?
If commission is part of the funds in the trust account, the commission portion is paid out promptly with records showing the amount and source, but only if the broker was previously authorized to make that payment (N.J.A.C. 11:5-5.1(d)).
Does the Real Estate Commission know where a broker's trust account is?
Yes. A broker files an affidavit or certification naming the bank and account numbers with each license application or renewal, and reports any change right away (N.J.A.C. 11:5-5.1(b)).
Who decides whether a buyer gets the deposit back?
The contract's terms control, not the agent. If the parties disagree, the licensee should recommend legal counsel (N.J.A.C. 11:5-6.4(i)).