Reservation, deposit, earnest money… used as synonyms but they are not. Confusing them can cost you money. We clarify it.
Buying & Selling · Updated January 2026 · 5 min read
When reserving a home you may be asked for a "reservation", a "deposit" or "earnest money". Although used as synonyms, their legal effects differ, especially if someone backs out.
It is usually a document (often from the agency) by which, in exchange for an amount, the home is taken off the market for a time. It is key to read what happens to the money if the deal does not go ahead.
The term "deposit" is ambiguous: its effect depends on how the document is drafted. That is why what matters is not the name but what the contract says. We review and draft the document —reservation or earnest money— before you pay.
Not necessarily. 'Deposit' is an ambiguous term whose effect depends on how the document is drafted; earnest money (especially penitential) has a specific regime. What matters is what the contract says, not the name.
It depends on what the reservation document says. Some provide for a refund and others do not. It is worth reading it carefully before handing over any amount.
We review what you sign and what it implies before you hand over any money for the home.
