Making an offer on a home in Lake Stevens and unsure how much earnest money to put down? You are not alone. This small but important deposit can strengthen your offer and protect you when it is handled correctly. In this guide, you will learn what earnest money is, typical amounts for Snohomish County buyers, how funds are held and protected in Washington, and practical strategies to stay competitive without taking on unnecessary risk. Let’s dive in.
What earnest money is and why it matters
Earnest money, sometimes called a good‑faith deposit, is money you put down with your offer to show the seller you are serious. If the sale closes, it is applied to your purchase price and closing costs. If you cancel under a permitted contingency, it is usually refunded to you.
Earnest money serves three purposes. It strengthens your offer, provides the seller limited protection if you breach the contract, and becomes part of your funds at closing. Your purchase and sale agreement sets where the money is held, the deposit deadline, and the conditions for refund or forfeiture.
How much earnest money in Lake Stevens
There is no one‑size rule, but a common range is $1,000 to $5,000 or roughly 1 to 3 percent of the purchase price. In many Washington transactions, buyers often start around 1 to 2 percent. The right amount depends on your budget, the home’s price, and current market pressure in Snohomish County.
When inventory is tight and multiple offers are common, larger deposits and shorter contingency windows can help you stand out. In steadier markets, a moderate deposit with well‑structured contingencies usually does the job. Check with your agent for current Snohomish County conditions so your deposit aligns with local norms.
What influences your deposit size
- Price point and property type.
- Competition level in Lake Stevens and nearby areas.
- Your comfort with risk and the contingencies you include.
- Strength of your preapproval and proof of funds.
Where your deposit goes in Washington
Who holds the money
Earnest money is typically held by a neutral escrow or title company. In some cases, a brokerage holds funds in a designated trust account, or an attorney may serve as escrow agent. Naming a reputable, neutral escrow or title company in your offer is a best practice.
Washington rules and protections
In Washington, licensed real estate brokers who accept client funds must place them into a properly designated trust account and keep them separate from business funds. Brokerages and escrow holders are regulated and audited under state licensing rules. Title and escrow companies follow strict trust‑account procedures and disburse funds only according to the purchase agreement and escrow instructions.
Receipts and documentation
Ask for a written receipt as soon as you deposit earnest money. It should show the escrow account name, date, amount, and reference to your transaction. Keep copies of your signed purchase agreement and any escrow instructions that control how and when funds can be released.
Wire‑fraud safety
Real estate wire fraud is a real risk. Before you send any funds, verify wiring instructions directly with your escrow or title company using a trusted phone number, not an email link. Do not rely on last‑minute emailed changes. Confirm the company’s name and account details, and ask your bank to double‑check the recipient before sending.
Contingencies and timelines that protect you
Common contingencies
- Inspection contingency, so you can evaluate the home and cancel or negotiate within a set period.
- Financing contingency, which protects you if your loan is not approved in time.
- Appraisal contingency, in case the property appraises below the price.
- Title and HOA document review, so you can examine exceptions and community documents.
- Seller disclosure review, allowing time to read and respond to the property disclosure.
Typical timelines
Contract timelines are negotiable, but common ranges include:
- Deposit delivery within 1 to 3 business days after mutual acceptance.
- Inspection period of about 5 to 10 days.
- Loan commitment within about 21 to 30 days.
- Overall escrow and closing in about 30 to 45 days.
Always follow the exact deadlines in your signed purchase and sale agreement.
What happens to earnest money
If you satisfy or properly waive contingencies and close, your deposit is applied to your purchase. If you cancel within a valid contingency period, you are typically entitled to a refund. If you breach outside of any allowed contingency, the seller may have remedies. Many Washington contracts include a liquidated damages option that can allow the seller to keep the deposit as the sole remedy if elected by the parties and if it applies to the situation. If a seller breaches, you may be entitled to a refund and other contract remedies.
Disputes and release of funds
If you and the seller disagree about who should get the deposit, escrow will usually hold funds until it receives joint written instructions, an agreement per the escrow instructions, or an arbitration, mediation, or court order. Review your contract’s dispute‑resolution and liquidated‑damages sections and consult your broker or a real‑estate attorney if a dispute arises.
Smart strategies for Lake Stevens buyers
Make a competitive but safe offer
- Consider a larger deposit that still fits your risk tolerance.
- Shorten inspection or financing timelines only if you can realistically meet them.
- Include a strong preapproval and proof of funds for the deposit.
- If you use an escalation clause, keep the terms clear and aligned with your budget.
Tips for first‑time buyers
- Keep core protections like inspection and financing contingencies.
- Do not waive protections just to win unless you fully understand the risk.
- Have your inspector and lender lined up before you write.
Tips for move‑up buyers
- Coordinate the sale of your current home with your purchase timeline.
- Explore bridge financing or sale contingencies with your lender and agent.
- Plan for two sets of deadlines and extra documentation.
When to get legal help
If the seller claims your earnest money after a disputed breach, or escrow will not release funds without mutual consent, contact a real‑estate attorney. Clear legal advice can help you resolve disputes and protect your interests.
Step‑by‑step: handling your deposit
- Name a reputable escrow or title company in your offer.
- Deliver funds within the contract deadline by wire or cashier’s check.
- Get a written escrow receipt immediately and save it.
- Keep copies of the contract pages that show deposit amount, deadline, and release conditions.
- Verify wiring instructions by phone using a known, trusted number.
- Confirm with escrow when funds are received and cleared.
- Track all contingency deadlines on your calendar and set reminders.
- Coordinate with your lender and inspector early to meet timelines.
The bottom line
Earnest money is a powerful part of your Lake Stevens offer when it is sized and handled well. Focus on a deposit that fits local norms and your comfort level, name a trusted escrow holder, and protect yourself with clear contingencies and tight deadline management. If you want an experienced local team to help you structure a competitive offer and safeguard your deposit, connect with Haines Huff Properties for guidance tailored to Snohomish County.
FAQs
Is earnest money refundable in Washington home purchases?
- Generally yes if you cancel within an applicable contingency period and follow the contract. If you breach outside allowed contingencies, the seller may be entitled to keep it depending on the contract.
How much earnest money should I offer in Lake Stevens?
- Many buyers start around $1,000 to $5,000 or about 1 to 3 percent of the price. Adjust based on current Snohomish County competition and keep key contingency protections in place.
Where should my earnest money be held in Washington?
- In a neutral escrow or title company trust account named in your contract. Avoid giving a check to an individual to hold personally.
What if my loan or appraisal falls through?
- If you included financing or appraisal contingencies and act within the timelines, you should be entitled to a refund. Always follow the exact contract deadlines.
Can a seller keep my earnest money if they refuse to sell?
- No. If the seller breaches, you may be entitled to a refund and other remedies, subject to your contract’s terms.
What documents should I keep related to my deposit?
- Keep your signed purchase agreement, the escrow receipt for your deposit, inspection reports, lender correspondence, and any written changes or extensions to deadlines.