Earnest Money in Seattle: What Buyers Need to Know

Thinking about buying a home in Seattle and hearing a lot about earnest money? You are not alone. In a fast-moving market, that deposit can make your offer stand out and protect the deal when things get bumpy. In this guide, you will learn what earnest money is, how it works in King County, typical amounts, timelines, protections, and the pitfalls to avoid so you do not put your deposit at risk. Let’s dive in.

What earnest money is

Earnest money (also called an earnest money deposit or good faith deposit) is the upfront amount you agree to deposit with an escrow or title company after your offer is accepted. It shows the seller you are serious. If you close, the deposit is applied to your purchase price.

The deposit gives the seller some security if a buyer breaches the contract. It is typically refundable when you terminate properly under the contract’s contingencies and deadlines. The exact outcomes always depend on the language in your purchase agreement.

Who holds the deposit

In Greater Seattle, an independent escrow or title company holds your earnest money in a trust account. Your contract will list the escrow holder and instructions for delivery. Escrow will provide wiring instructions and a receipt when funds arrive.

Typical Seattle deposit amounts

There is no fixed rule for how much to offer, but common ranges in King County are:

• About 1% to 3% of the purchase price, or
• A flat amount between $5,000 and $25,000, depending on price point and competitiveness.

In multiple-offer situations or when buyers waive contingencies, deposits are often higher. Some buyers choose very large deposits to signal strength, but higher deposits increase risk if you default. Your strategy should match the property, the market, and your comfort level.

What drives your amount

• Local market temperature and competition.
• Home price and whether it is a hot neighborhood or new development.
• Whether you keep or waive key contingencies (inspection, financing, appraisal).
• Your financing type and timeline.
• Seller expectations and any competing offers.

How and when to deliver

Your purchase agreement will set a deadline for delivering the deposit to escrow. In Seattle-area practice, buyers commonly wire funds within 1 to 3 business days after mutual acceptance. Always check your contract for the exact deadline.

• Wire transfer is the standard for speed and traceability. Checks can be slower and are not ideal when time is tight.
• Ask escrow how to confirm delivery. Keep your wire confirmation and request a receipt from escrow.
• Funds are usually held in a non-interest-bearing trust account unless your contract specifies otherwise.

Refunds, releases, and remedies

Earnest money is typically refundable if you terminate within a contingency period (inspection, financing, appraisal) or if the seller defaults. To release funds, escrow usually needs written instructions signed by both buyer and seller, or a court or arbitration order if there is a dispute.

If a buyer breaches outside allowed termination rights, the seller may have remedies. Depending on your contract, the seller might keep the deposit as liquidated damages, seek additional damages, or pursue specific performance. The exact remedy depends on the form language you agree to, so review those clauses with your agent and, if needed, an attorney.

Contingencies and your EMD

Contingencies outline when you can terminate and keep your deposit. In many Seattle-area offers, timelines are tight and vary by negotiation.

• Inspection contingency: Often 5 to 10 days, but this is negotiable. If you terminate properly within this period, you typically receive a full refund.
• Financing contingency: If you do not obtain loan approval within the allowed period and terminate on time, your deposit is usually refundable.
• Appraisal contingency: If the appraisal comes in low and you terminate under your rights, the deposit is generally refundable.
• Waived contingencies: If you waive inspection, financing, or appraisal, you take on more risk. If you later back out without a contractual right, you could forfeit your deposit.

Always follow the notice requirements and deadlines stated in the contract. Missing them can put your funds at risk.

Buyer checklist

Set yourself up for success before and after your offer is accepted.

• Decide your deposit strategy based on price, competition, and contingencies.
• Confirm your funds are available and your bank can wire on short notice.
• Align on contingency timelines with your agent.
• Include a strong pre-approval or proof of funds with your offer.

Once your offer is accepted:

• Deliver your earnest money by the deadline listed in the contract. Keep wire confirmations and escrow receipts.
• Start inspections right away and track your contingency dates.
• Submit your full loan application promptly and keep everyone updated.

Sample timeline

Your contract controls the actual schedule, but here is a common flow:

• Day 0: Mutual acceptance of your offer.
• Days 1 to 3: Earnest money delivered to escrow per contract.
• Days 1 to 7 (or as negotiated): Inspection period, then repair negotiation or termination.
• Days 10 to 21: Financing and appraisal timelines (varies by lender and loan type).
• Closing: Earnest money is applied to your purchase price at closing or released earlier by mutual agreement.

Common pitfalls and how to avoid them

• Missing the deposit deadline. Send your wire early, verify receipt, and document everything.
• Waiving contingencies without understanding the risk. Consider shortening periods instead of waiving outright if you need protection.
• Not reading the remedies or liquidated damages clause. Know what happens if either side defaults.
• Wiring scams. Always verify instructions by calling escrow at a known phone number. Do not trust email-only instructions.
• Escrow disputes. Keep clean records of notices and deadlines. If a dispute arises, you may need a mutual release or a legal directive.
• Assuming funds earn interest or have extra protections. Ask escrow how your deposit will be handled.

Wire fraud safety

Wire fraud is a real risk. Protect your deposit with a few simple habits:

• Confirm wiring instructions by phone using a verified number from the escrow company’s official materials.
• Do not rely on emailed instructions alone and never click unknown links.
• Use your bank’s security features and multi-factor authentication.
• Double-check account numbers and send a small test wire if time allows.
• Notify escrow and your agent immediately if anything looks off.

What happens at closing

If the sale closes, your earnest money is applied to your purchase price or closing costs per the settlement statement. If the transaction is extended or delayed, your deposit typically stays in escrow subject to the contract and any agreed extensions. If the deal is canceled, escrow holds funds until both parties sign release instructions or a legal directive is issued.

Local Seattle insights

Seattle and the Eastside can shift quickly between balanced and competitive conditions. In hotter weeks, larger deposits are more common and timelines get tight. The safest approach is to match your deposit and contingency strategy to current conditions, the property, and your comfort with risk. Your agent and the escrow officer can help you confirm realistic timelines and norms for your specific offer.

Ready to buy in Seattle?

Earnest money is a powerful tool when you use it wisely. With the right plan, you can write a strong offer and still protect your deposit. If you would like step-by-step guidance on deposit strategy, contingencies, and local timelines, reach out for a clear, calm path to the right home.

FAQs

How much earnest money should I offer in Seattle?

• In many King County purchases, buyers offer about 1% to 3% of price or a flat $5,000 to $25,000, adjusting up in multiple-offer situations based on risk and competition.

When must I deliver my earnest money after acceptance?

• Most contracts require delivery within a few business days after mutual acceptance. Your purchase agreement sets the exact deadline, so follow it closely.

Is earnest money refundable if I cancel?

• It is typically refundable if you terminate within a contingency period (inspection, financing, appraisal) or if the seller defaults. Contract language controls.

What if the appraisal is low in Seattle?

• If you have an appraisal contingency and terminate per the contract, the deposit is usually refundable. Without that contingency, risk increases.

Can I use down payment funds for my deposit?

• Yes, many buyers use part of their down payment funds for the earnest money, then the deposit is credited back to them at closing.

How do I wire earnest money safely?

• Call the escrow company at a verified phone number to confirm instructions, avoid emailed links, and keep your bank’s security features turned on.

What happens if the seller cancels or defaults?

• If the seller defaults, the buyer usually has a right to a refund. Specific remedies depend on the contract’s terms and dispute resolution clause.

Who decides the release of earnest money in a dispute?

• Escrow needs written instructions signed by buyer and seller or a court/arbitration order. Escrow does not decide on its own.

What if closing is delayed?

• The deposit typically stays in escrow while you follow any agreed extensions. If the deal later cancels, release rules still apply.

Can the seller keep my deposit if I terminate properly?

• If you terminate within a valid contingency period and follow notice rules, the deposit is typically refundable. Missing a deadline can change that outcome.