Are you wondering how much earnest money you need to compete for a home in Edmonds? Between fast-moving listings and tight timelines, it can feel confusing to know what is expected and how to protect your deposit. In this guide, you’ll learn what earnest money is, how much to budget locally, how refunds work under common contingencies, and smart ways to strengthen your offer without taking on unnecessary risk. Let’s dive in.
What earnest money is
Earnest money is a good-faith deposit you deliver after your offer is accepted to show you are serious about buying. A neutral third party, usually an escrow or title company, holds the funds in a trust account until closing or mutual release. If you complete the purchase, the deposit is credited to your cash to close, which may include your down payment and closing costs. The purchase agreement spells out who holds the funds, when they are due, and how they can be released.
Earnest money vs. other costs
Your earnest money is not your down payment, although it is credited toward it at closing. Inspection and appraisal fees are separate, out-of-pocket costs you pay during the process. Lenders do not collect earnest money; it is a contract deposit between you and the seller, held by escrow.
How much to expect in Edmonds
In many markets, including Snohomish County, a typical baseline is about 1–3% of the purchase price. In more competitive scenarios, buyers sometimes increase deposits to 2–5% or more to strengthen their offer. Rather than choosing a flat dollar amount, most buyers use a percentage so the deposit scales with price.
- Simple formula: purchase price × 0.01–0.03
- Example estimates:
- $500,000 home → $5,000–$15,000
- $800,000 home → $8,000–$24,000
- $1,200,000 home → $12,000–$36,000
These examples are illustrative. Ask your Edmonds-area agent for current norms based on price tier and competition.
Local factors in Snohomish County
- Inventory and days on market. Tighter inventory and faster sales often push deposits higher.
- Price tier. Higher-priced homes can see larger deposits, either as a percentage or flat amount.
- Seller preferences. Some sellers request higher deposits or specific release terms once contingencies are removed.
- Offer structure. If you are offering appraisal gap coverage or shortened timelines, you may not need the largest possible deposit.
How it protects you and the seller
Earnest money offers both sides a measure of protection. For sellers, it provides financial assurance if a buyer defaults without a permitted reason spelled out in the contract. Contracts often include liquidated-damages language that can allow a seller to keep the deposit in certain default situations, depending on the form and terms.
For buyers, the executed contract and deposit take the property off the market and activate your contingency protections. If the seller fails to perform or clear title per the agreement, you may be entitled to a return of your deposit and other remedies, as allowed by the contract.
Contingencies and refunds
In Washington, purchase and sale agreements commonly include contingencies that define when you can cancel and recover your deposit. If you properly terminate within a contingency period, earnest money is generally refundable per the contract.
Common Washington contingencies
- Inspection contingency
- Financing or mortgage contingency
- Appraisal contingency
- Title contingency
Once contingencies are satisfied, removed, or expire, your deposit is more at risk if you back out for reasons not allowed in the contract. Always review default and damages provisions carefully before you waive or shorten any contingency.
Disputes and release
If a transaction fails and the parties disagree on who gets the deposit, escrow typically needs a joint written release, a court order, or an arbitrator’s award if the contract calls for arbitration. Many standard forms used in Washington provide for mediation or arbitration to resolve disputes. Keep clear records of notices and deadlines so you can demonstrate you acted within the contract terms.
Budgeting and timing checklist
- Plan for a deposit equal to roughly 1–3% of your likely purchase price, with capacity to go higher if competition warrants it.
- Reserve additional funds for inspections, appraisal, and your remaining cash to close.
- Confirm who will hold your deposit and the exact delivery deadline in the contract.
- Know your transfer method in advance, and make sure funds are available when needed.
Deposit delivery and safety
Many Snohomish County sellers expect deposit delivery within 1–3 business days of mutual acceptance, but your purchase agreement controls the exact deadline. You will typically deliver the funds to the named escrow or title company.
Protect yourself from wire fraud with a few simple habits:
- Verify wiring instructions by calling a known, published phone number for the escrow or title company. Do not rely on email alone.
- Confirm the identity of your escrow contact using the company website or phone directory.
- Request verified transfer options, and keep proof of transfer.
- Confirm same-day receipt with escrow and save confirmations.
Competitive offer strategies
A larger earnest money deposit can help your offer stand out, but it is not the only lever. Consider these tactics with your agent:
- Shorten inspection or financing timelines only if you can move quickly and comfortably.
- Use an escalation clause tied to competing offers, structured carefully with clear caps.
- Offer an appraisal gap guarantee for a defined amount if appropriate for your finances.
- Provide strong financing proof and deliver your deposit promptly to signal reliability.
- Avoid waiving essential protections unless you fully understand the risk.
Questions to ask before you sign
- Who holds the deposit, and how will it be kept in trust?
- What is the exact delivery deadline and acceptable payment method?
- Under what specific conditions is the deposit refundable?
- What happens to the deposit if the seller defaults?
- Is there a liquidated-damages clause, and what does it allow?
- How are deposit disputes resolved, and is mediation or arbitration required?
Work with a local guide
Your earnest money is a powerful tool when you use it wisely. With thoughtful planning, clear contingencies, and safe delivery, you can strengthen your Edmonds offer without taking on avoidable risk. If you want local guidance on norms by price point, how to structure contingencies, and when a bigger deposit makes sense, our team is here to help.
Let’s map out a strategy that fits your goals and comfort level. Reach out to Haines Huff Properties for friendly, expert advice tailored to Edmonds and Snohomish County.
FAQs
What is earnest money in a home purchase?
- It is a good-faith deposit held in escrow after offer acceptance to show you are serious, later credited to your cash to close if the deal completes.
How much earnest money do Edmonds buyers usually put down?
- A common baseline is about 1–3% of the price, with higher amounts in competitive situations depending on property and terms.
When is earnest money due in Washington?
- Many contracts require delivery within 1–3 business days of mutual acceptance, but the purchase agreement sets the exact deadline.
Is earnest money refundable if I cancel?
- It is generally refundable if you cancel properly within a contingency period stated in your contract; once contingencies are removed or expire, risk increases.
Who holds my earnest money?
- A neutral third party, typically an escrow or title company named in your contract, holds the funds in a trust account.
What happens if there is a dispute over the deposit?
- Escrow usually needs a joint written release, a court order, or an arbitrator’s decision if required by the contract before releasing funds.
