What Is Form 50 — Earnest Money Disbursement Agreement in Washington Real Estate?
Form 50 is the Earnest Money Disbursement Agreement used in Washington real estate transactions to determine how earnest money is released if a transaction does not close.
When a buyer submits an offer, they typically provide earnest money to demonstrate serious intent to purchase the property. That money is usually held by the escrow company during the transaction.
If the transaction fails to close, both the buyer and seller must agree on what happens to the earnest money. Form 50 provides the written agreement needed to release those funds.
This form is commonly used when a contract under the Purchase and Sale Agreement (Form 21) terminates before closing.
Video: Form 50 Earnest Money Disbursement Explained
Why the Earnest Money Disbursement Form Exists
Earnest money is typically held in escrow while the transaction is in progress.
If the transaction fails to close, escrow cannot simply release the funds without written instructions.
Form 50 provides the instructions needed to tell escrow:
- who receives the earnest money
- how the funds should be distributed
- that both parties agree to the release
Without written agreement, escrow companies cannot disburse the funds.
Common Situations Where Form 50 Is Used
Form 50 is often used when a real estate transaction terminates before closing.
Common scenarios include:
Buyer cancels under a contingency
For example, inspection or financing contingencies.
Buyer default
The buyer fails to meet contract obligations.
Mutual agreement to terminate
Both parties agree to cancel the transaction.
In each case, Form 50 documents how the earnest money will be distributed.
Who Must Sign the Earnest Money Release
Because earnest money belongs to the parties involved in the contract, both the buyer and seller typically must sign the disbursement agreement.
The signed form gives the escrow company authorization to release the funds according to the instructions in the document.
Without signatures from both parties, escrow may be required to hold the funds until the dispute is resolved.
What Happens If There Is a Dispute Over Earnest Money
If the buyer and seller cannot agree on how the earnest money should be distributed, the situation may become a legal dispute.
Possible outcomes include:
- negotiation between the parties
- mediation or arbitration
- court action to determine entitlement to the funds
Because of this, many disputes are resolved through negotiation before reaching that stage.
Why Form 50 Matters in Washington Real Estate
Earnest money is one of the key financial protections built into real estate contracts.
Form 50 provides the mechanism for releasing those funds when a transaction ends before closing.
Understanding how the earnest money release process works helps buyers and sellers navigate contract cancellations more clearly.
You can explore the full library of Washington real estate process explanations here.
Bottom Line
Form 50 is the Earnest Money Disbursement Agreement used in Washington real estate transactions to determine how earnest money is released if a transaction fails to close.
FAQ
What is Form 50 in Washington real estate?
Form 50 is the Earnest Money Disbursement Agreement used to determine how earnest money is released when a real estate transaction fails to close.
Who holds the earnest money during a real estate transaction?
Earnest money is typically held by the escrow company until the transaction closes or the contract terminates.
Who decides who receives the earnest money?
Both the buyer and seller must agree on how the earnest money will be distributed and sign the disbursement agreement.
What happens if the buyer and seller disagree about earnest money?
If the parties cannot agree, the dispute may need to be resolved through negotiation, mediation, or legal action.
Can escrow release earnest money without signatures?
No. Escrow companies generally require written authorization from both parties before releasing earnest money.