Release of Earnest Money Addendum

Release of Earnest Money Addendum

Last updated April 7th, 2023

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A release of earnest money addendum is a waiver attached to a purchase agreement that relays how an earnest money deposit made by the buyer will be distributed. The form instructs the agent holding the deposit to distribute the funds held in escrow. The money will either be released to one party, divided between the buyer and seller, or released in some other manner as agreed by both parties.


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1. THE PARTIES. This Release of Earnest Money Addendum (“Addendum”) made this [MM/DD/YYYY] is by and between:

Seller: [SELLER’S NAME] (“Seller”) and

Buyer: [BUYER’S NAME] (“Buyer”).

The Seller and Buyer are each referred to herein as a “Party” and, collectively, as the “Parties.”

2. ORIGINAL AGREEMENT. This Addendum is being added to the purchase agreement between the Parties, dated [MM/DD/YYYY], for the property located at [PROPERTY ADDRESS] (“Original Agreement”).

3. DISBURSEMENT. The Parties direct the [ESCROW AGENT] (“Escrow Agent”) to release the total earnest money amount of $[AMOUNT] held by the Escrow Agent to the Seller.

4. INDEMNIFICATION. This Release shall hold harmless the Parties, Escrow Agent, and any other parties in connection with the Original Agreement from liability.

5. EXECUTION. This Addendum may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Authorization and release of funds will be transferred immediately after execution by the Parties.

Seller’s Signature: ___________________ Date: [MM/DD/YYYY]
Print Name: [SELLER’S NAME]

Buyer’s Signature: ___________________ Date: [MM/DD/YYYY]
Print Name: [BUYER’S NAME]

Distribution of Earnest Money

The directions in the addendum on how to distribute the earnest money will be based on outcome of the purchase agreement:

  • Buyer defaults on the purchase: The deposit will usually be released to the seller.
  • Purchase is completed: The earnest money will go towards payment of the total purchase price.
  • Buyer finds defaults in the property: The funds will generally be returned to the buyer.
  • Parties cannot agree on who will receive the deposit: The parties must come to a resolution or seek a court order to release the money.