Feeling unsure about how much earnest money to offer on a Seattle home, when to deposit it, or how to keep it safe? You are not alone. Earnest money is a key part of a strong offer in Washington, and it also carries risk if you miss deadlines or waive protections. In this guide, you will learn what earnest money is, how it works in Seattle and King County, how contingencies affect refunds, and how to structure a competitive offer without taking on unnecessary risk. Let’s dive in.
Earnest money basics
Earnest money is a buyer deposit you deliver after your offer is accepted to show good faith. It is not your full down payment. If the sale closes, the deposit is credited to you at closing.
For sellers, earnest money shows commitment and provides immediate security. For buyers, it can make your offer more compelling, but it creates risk if you default or remove protections and then try to cancel.
Your contract controls what happens to the deposit if things go wrong. Standard forms in our area give options for how earnest money is handled if a buyer defaults. The details live in the Northwest Multiple Listing Service (NWMLS) purchase and sale agreement you sign.
How it works in Seattle and King County
Who holds the deposit
In Seattle, earnest money is typically held by the title or escrow company named in your contract. Sometimes the listing brokerage holds it in a broker trust account. The agreement will specify who receives the funds.
When you deposit it
Your contract sets the deposit deadline. In local practice, buyers often deliver earnest money within 1 to 3 business days after mutual acceptance. Follow your agreement exactly and get a written receipt from the holder.
How funds are held and applied
The deposit sits in an escrow or trust account until closing. If the sale closes, it is credited toward your down payment or closing costs.
If the deal terminates, the escrow holder releases the money only with proper authorization. That usually means a written mutual release signed by both parties or a legal order.
What to keep on file
Keep copies of your check or wire confirmation, the escrow receipt, and the contract clause naming the escrow holder and the deposit deadline. These records help if questions come up later.
Refunds and contingencies in NWMLS contracts
Contingencies that protect your deposit
Common protections in our market include:
- Inspection contingency: lets you inspect and either negotiate or cancel within the inspection period.
- Financing contingency: protects you if your loan cannot be approved within the agreed timeline.
- Appraisal contingency: addresses a low appraisal and may allow renegotiation or cancellation.
- Title contingency: gives options if title issues appear.
- Sale of home contingency: used when you must sell your current home first, though it is less competitive.
When earnest money is typically refundable
If you cancel within a valid contingency period and give notice in the way your contract requires, your earnest money is usually refundable. Timing and notice rules matter, so meet the dates and use the required forms or written notices.
When the seller may keep it
If you remove protections, miss a deadline, or otherwise default, your ability to recover the deposit is limited. Many NWMLS forms include an option that allows a seller to keep the deposit as liquidated damages if a buyer defaults. Whether that applies depends on the boxes checked and the language you agreed to.
If there is a dispute
When buyer and seller disagree on who should receive the deposit, escrow cannot release funds without proper instructions. Disputes are often resolved by negotiation or mediation. Sometimes a court order is required.
How much earnest money in Seattle
In Seattle and the North Sound, many buyers plan for 1 to 3 percent of the purchase price. The right amount depends on the home and the level of competition.
- Typical range: 1 to 3 percent of price.
- Competitive offers or higher price points: larger fixed amounts are common, such as 10,000 to 50,000 dollars or more.
- Lower-priced homes or condos: a few thousand dollars can be customary, such as 2,000 to 10,000 dollars.
Examples for planning:
- 1 percent of 700,000 dollars equals 7,000 dollars.
- 2 percent of 800,000 dollars equals 16,000 dollars.
- Flat deposits often land between 5,000 and 25,000 dollars.
What influences the size
- Local supply and demand. Multiple-offer homes push deposits higher.
- Your risk comfort versus your need to compete.
- Seller expectations and how your other terms look.
- Property type. New construction often requires larger deposits.
Offer structures that work
- Competitive but lean: larger deposit around 2 percent, short inspection period, strong proof of funds and preapproval.
- Protective and steady: moderate deposit of 5,000 to 10,000 dollars, standard inspection and financing contingencies, clear written deadlines.
Strategy: compete without unnecessary risk
Before you write an offer
- Get a written lender preapproval, not just a prequalification.
- Ask your agent about current norms in your micro-market within Seattle and the North Sound.
- Decide your earnest money amount based on price point and competition.
Earnest money checklist
- Confirm the deposit deadline in the NWMLS agreement and calendar it.
- Choose a known escrow or title company in the contract.
- Use a traceable payment method and keep the confirmation.
- Include contingency timelines and know how to deliver written notices.
- Do not waive the inspection contingency unless you understand and accept the risk.
- Consider an escalation clause if it helps you compete without overcommitting cash.
Protect your deposit from wire fraud
- Always verify wiring instructions directly with the escrow or title company using a known phone number.
- Never rely only on email for wiring details.
- Get an escrow receipt as soon as funds are delivered.
If you are relocating
- Work with a local agent and an escrow company familiar with NWMLS practices.
- Use contingencies for protection rather than offering a very large nonrefundable deposit.
If things go sideways
- Follow notice requirements exactly and on time.
- Talk with your agent about negotiation or mediation if a dispute arises.
- Expect escrow to require a mutual release or a legal order to release funds if there is no agreement.
Seattle buyer scenarios
Multiple offers on a well-priced home
You offer 2 percent earnest money, a five-day inspection period, and provide a strong preapproval. You keep financing and appraisal protections. Your deposit shows commitment without giving up key safeguards.
Balanced market, standard timeline
You offer a flat 10,000 dollar deposit with standard inspection and financing contingencies. You meet the deposit deadline, document everything, and keep flexibility while remaining competitive.
New construction purchase
Builder requests a larger deposit. You plan for a higher amount, confirm timelines in the builder’s addenda, and keep clear documentation of all dates and notices.
Key takeaways for Seattle buyers
Earnest money helps your offer stand out, but the contract controls your risk. In King County, deposits are usually held by escrow or title and are applied to your costs at closing. Refundability hinges on your contingencies and deadlines. Aim for an amount that fits local norms and your comfort level, and back it up with a clean, timely process.
If you want a local plan for deposit size, timelines, and protections that fit your goals, connect with Team NSRG. Our education-first approach and neighborhood insight help you compete with confidence.
FAQs
What is earnest money in Washington real estate?
- It is a buyer deposit paid after offer acceptance to show good faith, held in escrow and applied to your costs at closing if the sale completes.
When is earnest money due in Seattle and King County?
- Your NWMLS purchase agreement sets the deadline, and many buyers deposit within 1 to 3 business days after mutual acceptance.
Who holds my earnest money in Seattle?
- The contract names the holder, typically a title or escrow company, or in some cases the listing brokerage’s trust account.
Is earnest money refundable if I cancel?
- It is usually refundable if you cancel within a valid contingency period and deliver notice exactly as the contract requires.
Can the seller keep my earnest money if I default?
- Yes, depending on your contract; many forms include an option for the seller to keep the deposit as liquidated damages if a buyer defaults.
How much earnest money should I offer in Seattle?
- Many buyers plan for 1 to 3 percent of the price, with larger fixed amounts common in multiple-offer situations.
What proof should I keep after I deposit the funds?
- Save your check or wire confirmation, the escrow receipt, and the contract language naming the escrow holder and deposit deadlines.
What happens if buyer and seller disagree on release?
- Escrow will hold the funds until it receives a mutual release or a legal order; disputes often resolve through negotiation or mediation.
