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Follow the buyer's good-faith deposit.

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Earnest money is held and disbursed according to the purchase

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contract and applicable requirements.

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The deposit moves into proper custody.

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At closing it may be credited as the contract provides.

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Holding the money does not make it the broker's operating

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cash.

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Now imagine a transaction that does not close.

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Do not jump straight to giving the deposit to either

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party.

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The contract and lawful release procedures determine the outcome.

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Earnest money is also different from the consideration supporting the

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bargain.

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Quick check:

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does a buyer's default automatically authorize immediate payment of the

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deposit to the seller?

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No.

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Follow the contract and lawful disbursement requirements.