Earnest Money in Seattle: What Buyers Should Know

Have you heard you need “earnest money” to buy a home in Seattle and wondered how much to put down and what happens to it? You are not alone. When you understand how earnest money works, you can write a stronger offer without taking on more risk than you want. In this guide, you will learn what earnest money is, typical amounts and timelines in Seattle, when it is refundable, and smart ways to right-size your deposit in competitive situations. Let’s dive in.

What earnest money is

Earnest money, sometimes called an earnest money deposit or good-faith deposit, is money you provide after your offer is accepted to show you intend to complete the purchase. It is held in an escrow or broker trust account and is applied to your down payment and closing costs at closing. It is not an extra fee. If the sale closes, the funds are credited to you on the settlement statement.

In Washington, the purchase and sale agreement sets the deposit deadline, where the funds are held, and what happens in a dispute. If there is a disagreement about who gets the earnest money, the escrow holder will usually keep the funds until a signed mutual release, mediation or arbitration result, or a court order resolves it.

Typical Seattle amounts

There is no fixed statewide amount. In the Seattle and King County area, the amount varies by price point and competitiveness. Many offers include about 1 percent to 3 percent of the purchase price as earnest money. In very competitive, multiple-offer situations, buyers sometimes offer 2 percent to 5 percent or a strong flat amount to stand out. For condos or lower-priced homes, the dollar amount can be smaller but still proportional to the price.

The key idea is simple. A larger deposit can signal stronger commitment, but it also increases your exposure if you waive protections and cannot close.

Deposit and contingency timelines

Most sellers expect you to deliver the deposit to escrow quickly after mutual acceptance, often within 1 to 3 business days. Your contract will set the exact delivery deadline.

Refundability is tied to your contingencies and their deadlines. Typical windows, which are negotiated in each deal, often look like this:

• Inspection or due diligence: about 3 to 10 days
• Financing: time to loan commitment, often 21 to 30 days
• Appraisal and title: aligned with the closing timeline or specific deadlines in the contract

At closing, your earnest money is applied to the purchase price, and you bring the remaining funds per the closing statement.

When you get it back

Earnest money is refundable if you end the contract under a valid contingency within the deadline and you follow the notice steps in the contract. Common protections include:

• Inspection contingency: You can terminate during the inspection period and receive a refund if you give timely notice.
• Financing contingency: If you cannot obtain financing by the deadline, you may be able to cancel and keep your funds if you follow the contract.
• Appraisal contingency: If the appraisal comes in low and you cannot reach a solution, you may have the right to cancel and receive a refund.
• Title or survey issues: Unresolved title defects or unacceptable encumbrances can allow you to cancel with a refund.

If you miss a deadline or walk away without a contractual basis, the seller may seek to keep the earnest money as damages, or pursue other remedies as allowed by the contract.

How earnest money boosts offer strength

Sellers look at earnest money to gauge risk between acceptance and closing. Larger deposits and faster delivery reduce uncertainty. Shorter contingency windows can also help, if you are prepared to meet them.

Tactics you might consider with guidance from your agent include:

• Offer a larger deposit to signal commitment.
• Deposit within 24 to 48 hours instead of several days.
• Shorten contingency periods only if your lender, inspector, and timeline support it.
• Pair a strong deposit with a clean, clear offer and solid pre-approval so the whole package feels credible.

Always weigh the trade-offs. Bigger deposits and fewer protections increase risk if something goes wrong.

Right-size your deposit

Use this simple framework to choose an amount that is competitive and comfortable:

1. Assess your risk tolerance

• First-time or tight financing: favor a smaller deposit with protective contingencies.
• Strong down payment and pre-approval: consider a larger deposit to stand out.

2. Read the property and competition

• Hot, low-inventory listing: stronger earnest money and faster delivery can help.
• Longer days on market: a modest deposit may be acceptable.

3. Align with price and protections

• Keep the deposit proportional to the price and to what you can afford to risk.
• Preserve key safeguards like inspection and financing when you can. If you shorten windows, confirm your team can perform on time.

4. Coordinate with escrow and lender

• Confirm how and when to deliver funds.
• Verify underwriting timelines so your financing deadlines are realistic.

5. Be ready to execute

• Have funds accessible for a wire or cashier’s check.
• Track contingency deadlines and understand the steps to give notice if you need to cancel.

Safe delivery and wire fraud

Escrow companies accept wires and checks. Wiring is common for speed, but wire fraud is a real risk. Always confirm wiring instructions by calling a known, trusted phone number for the escrow company. Do not rely on a new email with changed instructions. When in doubt, verify in person or by a number you independently source.

Example approaches

Here are three illustrative approaches you can discuss with your agent. These are examples, not rules:

• Low-risk approach: A modest deposit, for example $2,500 to $5,000 or about 1 percent at lower price ranges, with standard windows like 7 to 10 days for inspection and 21 to 30 days for financing. Works best on less competitive listings.
• Competitive approach: A larger deposit such as 1 percent to 3 percent or a stronger flat amount, delivered within 24 to 48 hours. Shorten inspection to 3 to 5 days while keeping financing protection. Pair with a solid pre-approval.
• Aggressive approach: A very large deposit, sometimes 2 percent to 5 percent or more, with some waived or very short contingencies. Highest chance to win, highest buyer risk.

Work with a local advisor

Every Seattle neighborhood and price band moves a little differently, and norms change with the market. A local advisor will help you calibrate the amount, delivery timing, and contingency windows that fit your goals. If you want a tailored plan for your next offer, reach out to Larissa Wilson for a private consultation.

FAQs

What is earnest money in a Seattle home purchase?

• Earnest money is a good-faith deposit you provide after an offer is accepted, held in escrow or a broker trust account, and credited to your funds at closing.

How much earnest money is typical in Seattle?

• Many buyers offer about 1 percent to 3 percent of the price, while highly competitive situations may see 2 percent to 5 percent or a strong flat amount to signal commitment.

When is earnest money refundable in Washington?

• It is refundable if you cancel within a valid contingency period, such as inspection or financing, and provide notice according to the contract timelines and procedures.

How fast should I deposit earnest money in King County?

• Delivery is often within 1 to 3 business days after mutual acceptance, and faster delivery like 24 to 48 hours can strengthen your offer if your contract states that timeline.

Is earnest money the same as my down payment?

• It is part of your total funds to close. If the sale completes, the deposit is credited to your down payment and closing costs on the settlement statement.

What if the appraisal comes in low in Seattle?

• If you have an appraisal contingency and cannot resolve a low appraisal, you may be able to cancel within the deadline and receive a refund of your earnest money.

What happens if the seller backs out after accepting my offer?

• If a seller breaches an accepted contract, you may be entitled to a refund of your deposit and possibly other remedies, subject to the contract terms and timelines.

How do I avoid wire fraud when sending earnest money?

• Verify wiring instructions by phone using a trusted number for the escrow company, and never rely solely on email for any changes to instructions.