Follow the buyer's good-faith deposit. Earnest money is held and disbursed according to the purchase contract and applicable requirements. The deposit moves into proper custody. At closing it may be credited as the contract provides. Holding the money does not make it the broker's operating cash. Now imagine a transaction that does not close. Do not jump straight to giving the deposit to either party. The contract and lawful release procedures determine the outcome. Earnest money is also different from the consideration supporting the bargain. Quick check: does a buyer's default automatically authorize immediate payment of the deposit to the seller? No. Follow the contract and lawful disbursement requirements.