Hello BP Family. Question for seasoned investors or Developers.

Is it normal for new build(quadplex) to have Earnest money goto developer company instead of Title company? Off course, it’s non -refundable which I’m not worried unless I back out which I have no intentions to do so but my worry is if this developer goes out of business for any reason?

I would appreciate any help with pros & cons. They already have my 6k option money (lot hold) which I will loose, if I back out now. I have call setup tomorrow with developer to speak to him regards to this. Just want to do my homework.

TIA