Where is my earnest money held, and can I lose it?

Earnest money is held in an escrow account, usually managed by the closing attorney's office or a title company rather than by the buyer, seller or either agent directly. It stays there until closing, when it applies toward the buyer's costs, or until the contract terminates under one of its contingencies. A buyer can lose the deposit by walking away from the deal without a valid contingency to rely on, which is why reading those contingency deadlines matters before signing.