Earnest money records often sit in several systems: the contract, escrow receipt, bank ledger, amendment, cancellation notice, and closing statement. A reconciliation makes those records easier to follow without deciding who is entitled to funds. The reviewer’s job is to identify the amount, source, date, holder, instruction, and unresolved difference for the professional responsible for the matter.
Set the transaction baseline
Record property, contract date, parties, deposit amount stated in the signed agreement, deadline, payee or escrow holder, and every amendment that may change the amount. Use the signed version as the starting reference and link the source page. If the agreement contains more than one deposit, give each a distinct identifier instead of adding amounts into one unexplained total.
Collect payment evidence
Search receipts, wire confirmations, cancelled checks, portal records, escrow statements, and correspondence. Capture source, date, amount, payer, recipient, reference number, and whether the document is original or a copy. Do not call a deposit received because an email says it was sent. Use separate statuses for instructed, sent, received, credited, returned, and unverified.
Compare timing
Create a chronology of contract execution, payment instruction, transfer, receipt, notice, extension, and closing. Preserve time zones where electronic records show them. If a deadline depends on a contract event, record the event and the source of the calculation rather than presenting an independently calculated legal conclusion. A timeline exposes gaps for professional review.
Reconcile the escrow ledger
Compare the escrow holder’s ledger to the contract amount and payment evidence. Note fees, interest, partial payments, refunds, or transfers exactly as shown. A ledger balance may not answer whether the holder may release funds. Keep financial arithmetic separate from entitlement, cancellation, default, and dispute questions.
Follow amendments and notices
Link any extension, credit, assignment, cancellation, mutual release, or demand to the contract version it references. Record signature status and delivery evidence. If parties gave conflicting instructions, preserve each instruction, recipient, and date. Do not select the instruction that appears most recent without routing the conflict to the person authorized to decide.
Handle discrepancies
Common exceptions include amount differs, receipt absent, payer name differs, deadline source unclear, ledger period missing, duplicate receipt, and release instruction unsigned. Give each exception an owner and next action. Keep the original values visible. Reconciliation is strongest when another reviewer can reproduce the difference from the linked sources.
Prepare the closing handoff
The handoff should include a deposit schedule, source links, current ledger balance, unresolved exceptions, and the latest instruction. Identify what was independently verified and what came from a party statement. If the closing statement uses a different amount, add it as a new source and compare it rather than changing the earlier record.
| Reconciliation field | Evidence |
|---|---|
| Contract amount | Signed agreement and page |
| Payment event | Receipt or transfer record |
| Holder balance | Escrow ledger or statement |
| Change authority | Signed amendment or instruction |
| Open conflict | Competing source and owner |
The record does not determine entitlement, breach, forfeiture, or legal release. It gives the qualified professional a clean financial and document trail from which to make those decisions.
Preserve returned funds
If money was rejected, returned, reissued, or moved between accounts, index every event. A returned payment can explain why a later transfer occurred, while a replacement receipt may look like a duplicate if the first event is omitted. Preserve bank or escrow references and avoid storing unnecessary account numbers in the general index.
Perform a final arithmetic check
Re-add deposits, refunds, credits, and transfers from the source records. Record the formula and rounding convention used. If the numbers balance but the document authority does not, keep the authority question open. If the numbers do not balance, identify the exact row causing the variance. A transparent calculation is more useful than a single “balanced” label.
Record the review boundary
If the contract calls for a deposit to be held by a named party, compare that name with the receipt and ledger. A mismatch may be clerical or may require attention; the reconciliation should show it without deciding the result. Keep instructions, confirmations, and statements in chronological order for the handoff.
Where a receipt names a payer that is not a contract party, retain the payer name, payment reference, and correspondence explaining the source. Do not normalize the payer into a party record without evidence. A wire confirmation may show initiation while the escrow ledger shows posting on another date. Recording both events gives the responsible professional the chronology needed to assess the transaction under the governing documents.
A zero escrow balance can reflect closing disbursement, refund, transfer, or a record that is incomplete. Index the event that explains the balance and link the authorization or statement. Do not treat zero as proof that every obligation ended. Keeping the explanation with the number prevents a later reader from mistaking an accounting result for a determination about entitlement.
Date the reconciliation, name the source set, and state the cutoff. Later receipts or instructions should be appended as new events. This preserves the difference between a snapshot prepared for closing and a later dispute record. The file remains useful because it shows what was known, when it was known, and what still required a professional decision.