Buying in Edmonds and wondering how much earnest money to put down, when it is due, and what happens if a deal falls through? You are not alone. Earnest money plays a big role in how strong your offer looks and how protected your funds are as you move from offer to closing. In this guide, you will learn what earnest money is, how it works in Washington, and practical steps to keep your deposit safe in the Edmonds market. Let’s dive in.
What earnest money means
Earnest money is your good-faith deposit that goes in with your offer. It shows the seller you are serious and gives them some protection if you breach the contract. If the sale closes, your deposit is usually credited to your closing costs or down payment.
It is not the same as your down payment. Think of it as a separate deposit that sits in a neutral account until the contract closes or terminates.
How it works in Edmonds and Washington
Who holds the deposit
In most local purchases, the deposit is held by a neutral escrow or title company named in the purchase agreement. In some cases, it can be held in a brokerage trust account. Washington brokers and escrow companies follow strict rules for client funds.
When it is due
Your contract sets the deadline, often within a few business days of mutual acceptance. Plan for a quick turnaround and confirm the due date the moment your offer is accepted.
How much to offer in Edmonds
There is no fixed amount. In balanced conditions, you often see 1 to 3 percent of the price or a flat figure like 2,000 to 10,000 dollars. In more competitive Puget Sound situations, buyers may offer larger deposits to stand out. Amounts vary by price point and inventory, so check current Edmonds trends with your agent before you write.
Contingencies that protect your deposit
Your purchase agreement defines the rules for your earnest money. Common contingencies give you pathways to cancel and recover your deposit when used on time and as written.
Inspection contingency
If your inspection turns up issues you cannot accept, you can cancel within the inspection window and request your deposit back, provided you deliver the required notices and documentation on time.
Financing contingency
If you cannot secure a loan despite good-faith efforts and you meet the contract’s notice and documentation rules, you can usually cancel under the financing contingency and recover the deposit.
Appraisal contingency
If the appraisal is lower than the purchase price and you and the seller cannot bridge the gap, you can typically cancel under the appraisal contingency and protect your deposit if you act before the deadline.
Title contingency
If title research reveals problems that cannot be resolved, you may cancel under the title provisions and request the deposit back when the contract allows.
Nonrefundable deposits and risk
In some competitive offers, a buyer may agree to a nonrefundable deposit or a portion that becomes nonrefundable at a milestone. This can strengthen your offer but increases your risk. Consider the downside carefully and review the exact language with your agent. For larger deposits or complex terms, talk with an attorney before you agree.
Timelines, notices, and documentation
Deadlines are critical. Your rights often depend on sending the correct notice to the correct party by the exact time stated in the contract. Late or incomplete notices can jeopardize your deposit.
Keep clear records. Save inspection reports, lender communications, appraisal results, and copies of every notice you send. Confirm receipt in writing. These records matter if there is a dispute.
What can go wrong and what happens next
If a buyer fails to close without a contractually allowed reason or misses a key deadline, the seller may claim the earnest money as liquidated damages if the contract allows. In some agreements, the seller may pursue other remedies, although that is less common when the earnest money is designated as the sole remedy.
If you cancel properly under a contingency and the seller still refuses to release the deposit, escrow will usually hold the funds until both sides agree or a court or dispute-resolution process directs a release. Most contracts include steps like mediation or arbitration. Small claims court can be an option for smaller amounts.
Payment methods and wire-fraud safety
You will typically deposit earnest money by cashier’s check or wire transfer to the named escrow account. Some title companies offer secure electronic transfer methods. Personal checks can cause delays.
Wire-fraud prevention is essential. Confirm wiring instructions by calling the escrow or title company using a known phone number, not a number from an email. Use two-factor verification and never rely on emailed account changes without live confirmation.
Buyer checklist for Edmonds
Use this quick list to stay organized from offer through closing.
Before you write an offer
- Discuss an appropriate deposit amount for Edmonds with your local agent and decide if any portion should be nonrefundable.
- Prepare proof of funds or a lender letter, especially if you plan a larger deposit.
- Decide how much you can afford to risk if something goes wrong.
After mutual acceptance
- Confirm where and when the deposit is due and how you will deliver it. Get a written receipt from escrow.
- Verify the escrow officer’s name and contact details and store them in your records.
- Calendar every deadline: inspection, financing, appraisal, title review, and closing.
If you need to cancel
- Follow the contract instructions exactly. Send required notices and include any needed documentation.
- Ask for written confirmation from the seller side and escrow acknowledging the termination and the deposit release.
If there is a dispute
- Work with your agent to review the contract and your timeline. If the deposit is substantial, consider legal counsel.
- Follow the dispute-resolution steps in your contract. Escrow will usually hold funds until resolution.
Local context for Edmonds buyers
Edmonds is part of the greater Puget Sound market, where inventory and demand can shift quickly. In periods of higher competition, buyers sometimes use larger deposits or more aggressive terms. Since conditions change, align your deposit strategy with the latest local data and the specific property you are pursuing.
Final thoughts
A smart earnest money plan pairs a strong offer with clear protections and disciplined follow-through. Set the right amount for today’s Edmonds market, track every deadline, and keep your documentation tight. If you want hands-on guidance from offer to escrow coordination, the Six Degrees Team brings local expertise and process-driven transaction management to help you move with confidence.
Ready to map out a winning strategy for your next offer in Edmonds? Contact the Six Degrees Team to schedule a free consultation and home valuation.
FAQs
How much earnest money should I offer in Edmonds?
- It depends on price and competition, but buyers often see 1 to 3 percent of price or 2,000 to 10,000 dollars in balanced conditions, with higher amounts in competitive situations.
Where is earnest money held in Washington?
- Your purchase agreement names the holder, usually a title or escrow company, or sometimes a broker trust account. Always get written confirmation of receipt.
When is earnest money due after offer acceptance?
- The contract controls the timing. In many local deals it is due within a few business days of mutual acceptance, so be ready to deposit quickly.
Can I get my earnest money back after a bad inspection?
- Yes, if your contract includes an inspection contingency and you deliver the required notices and documentation within the inspection period.
What if my loan falls through in Edmonds?
- If you have a financing contingency and you act in good faith, provide required documentation, and meet the deadlines, you can typically cancel and recover your deposit.
What if the seller will not release my deposit?
- Escrow usually holds the funds until there is an agreement or a legal directive. Use the dispute-resolution steps in your contract and consider legal advice for larger sums.
