Buying a home in Seattle often moves fast, and the earnest money you offer can make the difference between winning and losing the house you love. You want to be competitive without taking on unnecessary risk. The good news is you can use earnest money to strengthen your offer while still protecting your deposit. In this guide, you’ll learn how earnest money works in Seattle, typical amounts, how it’s handled, and how to keep your funds safe. Let’s dive in.
What earnest money is
Earnest money is a good‑faith deposit that you provide after a seller accepts your offer. It shows you are serious and gives the seller a limited remedy if you later breach the contract. If the sale closes, your earnest money is credited to your purchase price and closing costs.
It is not the same as your down payment. It also differs from inspection or option fees used in some states. In Seattle and King County, the purchase agreement sets the rules for when the deposit is refundable versus forfeited.
Typical Seattle amounts
There is no single standard amount for Seattle. A common national guideline is about 1 to 3 percent of the purchase price, but local practice varies by neighborhood, property type, and how competitive the listing is.
- In routine offers, you often see $2,500 to $10,000 or roughly around 1 percent.
- In competitive or multiple‑offer situations, buyers may offer $10,000 to $50,000 or more to stand out, especially for single‑family homes in popular areas.
- For lower‑priced homes, a fixed dollar amount is common. For higher‑priced homes, buyers often use a percentage or a larger fixed sum.
For condos and townhomes, amounts are often similar to single‑family homes. New construction can be different because builder contracts may use staged deposits and stricter refund rules. Always review those terms carefully before you commit.
Where your deposit goes
Who holds the funds
Your earnest money is typically deposited with an escrow or title company or into a broker trust account. These entities must follow Washington rules for client trust funds. The money stays in a trust account until closing or until both parties sign a release or a court orders the funds to be released.
When you must deposit
Your contract sets the deadline. In Seattle, the timing is often within 1 to 3 business days after mutual acceptance. You should send the funds promptly and get written confirmation of receipt from escrow.
How to send money safely
Wire‑fraud attempts are common in real estate. Protect yourself by taking these steps:
- Call the escrow company at a phone number you find on their public website to confirm wiring instructions.
- Do not rely solely on phone numbers or instructions sent by email.
- Use accepted methods like a bank wire or cashier’s check, and ask for a written receipt showing the amount, date, and account details.
Refunds vs. forfeiture
Whether you get your earnest money back depends on the contract and the contingencies you keep or waive.
When it is usually refundable
If you end the contract within a valid contingency period and follow the notice rules in the agreement, your deposit is typically refunded. Common buyer protections include:
- Inspection contingency
- Financing (loan) contingency
- Appraisal contingency
- Title contingency
- HOA document review for condos
- Sale of buyer’s property contingency, if negotiated
You must act before each deadline and deliver required notices on time. If you miss a deadline, you may lose that protection.
When you could forfeit
You risk losing your deposit if you cancel after removing contingencies or if you fail to close without a valid contingency. Many local forms allow the seller to keep the earnest money as liquidated damages in these cases. Disputes can cause escrow to hold the funds until you and the seller sign a release or a court decides.
If the seller terminates improperly, you can usually request a refund and may explore other remedies. For builder contracts, deposits can be non‑refundable at certain stages, so read those agreements closely.
Key timelines to track
Seattle contracts are deadline driven. Common time frames include:
- Earnest money deposit: usually within 1 to 3 business days of acceptance
- Inspection period: often 5 to 10 days, negotiable
- Financing contingency: often 17 to 21 days, varies by lender and contract
- Appraisal timeline: typically set by the lender and aligned with financing timelines
- Closing date: often 30 to 45 days from acceptance
Put every deadline on your calendar, including the last day and cutoff time for notices. Confirm that escrow received and credited your earnest money.
Strategies to win and stay protected
You can present a strong offer without taking on avoidable risk. Consider these options:
- Offer a larger earnest money amount while keeping key contingencies. This shows commitment and can help your offer stand out.
- Shorten contingency periods instead of waiving them. For example, use a 7‑day inspection rather than no inspection at all.
- Use an appraisal gap clause that commits a set dollar amount toward a shortfall instead of waiving appraisal or financing protections entirely.
- Pair a strong deposit with flexible terms the seller values, such as a tailored closing date or a short rent‑back, if appropriate.
- If you are highly risk tolerant, understand that waiving inspection or financing can lead to total loss of earnest money if you later cancel. Make that choice only with full awareness of the risk.
Buyer checklist
Use this step‑by‑step list to stay on track:
Before you write an offer
- Decide on an earnest money strategy with your agent, including amount and contingencies.
- Get lender pre‑approval and confirm appraisal and loan timelines.
Right after mutual acceptance
- Deposit earnest money per contract and request a written receipt from escrow.
- Calendar every deadline: inspection, financing, appraisal, HOA review, and closing.
- Schedule inspections immediately and deliver any notices in writing before deadlines.
If a dispute arises
- Ask escrow for their procedures and keep all documentation.
- Review the contract for liquidated damages and dispute resolution steps.
- Consider speaking with a Washington real estate attorney for high‑stakes situations.
For wire transfers
- Independently verify wiring instructions using a phone number from the escrow company’s website.
Special cases: condos and new construction
For condos and townhomes, earnest money amounts generally mirror single‑family homes. Buyers usually receive an HOA document review period. If you cancel properly within that window under the contract, your deposit is typically refundable.
New construction often uses builder contracts that differ from standard local forms. Deposits may be staged and may become non‑refundable at certain milestones. Read every clause on deposit handling, change orders, and cancellation before you sign.
Common mistakes to avoid
- Sending a wire without verifying instructions by phone with escrow
- Missing a contingency deadline by a day or even by hours
- Waiving inspection or financing without understanding the full risk
- Assuming escrow will release funds without a mutual written release
- Forgetting to get a written deposit receipt from escrow
The bottom line
Earnest money is a powerful tool in Seattle. The right amount, paired with smart contingencies and clear timelines, can strengthen your offer and protect your funds. With a plan in place, you can compete confidently across neighborhoods like Queen Anne, Capitol Hill, Ballard, Magnolia, Belltown, and Downtown.
If you want a tailored earnest money strategy for your specific price point and timeline, reach out to Zac Lee. You will get clear guidance, local insight, and a process that helps you win the home and keep your money protected.
FAQs
How much earnest money should I offer in Seattle right now?
- Many buyers offer about 1 to 3 percent or $2,500 to $10,000 in routine situations, and $10,000 to $50,000 or more in competitive scenarios, depending on price and strategy.
Where does my earnest money go after I deposit it?
- It is usually held in an escrow or title company trust account, or a broker trust account, until closing or until both parties sign a release or a court orders disbursement.
Will I lose my earnest money if the appraisal comes in low?
- If you have an appraisal or financing contingency and follow the contract’s timelines and notice rules, you can usually cancel or renegotiate without forfeiting your deposit.
What is the difference between waiving inspection and using a short inspection period?
- Waiving removes your safety net and increases the risk of forfeiture if you later cancel, while a shorter inspection period keeps protection but moves faster for the seller.
Are deposits refundable if the seller changes terms after acceptance?
- Sellers cannot unilaterally change terms after mutual acceptance; if they do not perform, you can typically request a refund and consider remedies under the contract.
What happens to earnest money if the seller accepts another offer after mine?
- If you have a binding agreement and the seller wrongfully accepts another offer, escrow will usually hold funds until the dispute is resolved; you can typically seek a refund and other remedies.
How do I prevent wire fraud when sending earnest money in Seattle?
- Verify wiring instructions by calling the escrow company using the phone number on their public website, not a number from an email, and request written confirmation of receipt.
When can a seller keep my earnest money as liquidated damages?
- If you cancel after removing contingencies or fail to close without a valid contractual reason, many local contracts allow the seller to retain the deposit as liquidated damages.
