Have you heard you need “earnest money” to buy a home in Spokane and wondered how it really works? You are not alone. This deposit can make your offer stronger, but it also comes with rules you need to understand. In this guide, you will learn what earnest money is, how much buyers often put down in Spokane, when it is refundable, and how to protect your funds. Let’s dive in.
What earnest money is
Earnest money is a good‑faith deposit that shows a seller you are serious about buying the home. A neutral party holds it until closing. If the sale closes, the money is credited to your closing costs or down payment.
It is different from your down payment and different from the escrow your lender may set up for taxes and insurance. Think of it as a performance deposit tied to your purchase contract.
How much buyers put down in Spokane
There is no single Spokane number that fits every offer. As a starting point, many buyers in the United States put down about 1 to 3 percent of the purchase price. For many Spokane transactions, a flat amount of a few thousand dollars is common on average‑priced homes. In higher‑priced or multiple‑offer situations, buyers often increase deposits, sometimes to 2 to 5 percent or more, to stand out.
Local norms shift with price point and competition. To choose the right amount for your situation, do the following:
- Ask your Spokane agent for examples from recent accepted offers near your target price and neighborhood.
- Call a local title or escrow company and ask what deposits they are seeing on accepted contracts right now.
- Align your deposit with your risk tolerance and liquidity. Do not offer more than you can afford to put at risk if contingencies are waived or expire.
When earnest money is refundable
Your purchase contract controls when you can get your deposit back. Read it closely and watch deadlines.
Common refundable situations
- You cancel within the inspection period based on findings and send proper written notice on time.
- Your financing is denied within the financing contingency period and you give the required documentation.
- The appraisal contingency is not met and you cancel within the timeframe if your contract includes that contingency.
- The seller cannot deliver marketable title or meet agreed conditions.
- Both sides sign a mutual written release.
When you could forfeit funds
- You miss deadlines, waive protections, or cancel without a contractual reason after contingencies expire.
- You fail to deliver the deposit on time as the contract requires.
Many Washington purchase agreements include a remedies clause that can allow the seller to keep the deposit as liquidated damages if the buyer defaults. Ask your agent to explain the language before you sign.
Timelines to watch
- Deposit deadline. Many contracts require delivery within 1 to 3 business days after offer acceptance. Your contract controls the exact timing.
- Inspection window. Often 5 to 10 days in Washington contracts, but this varies by offer.
- Financing and appraisal periods. These can range from about 7 to 21 days or more depending on your terms.
To preserve your refund rights, send required notices in writing and on time, and keep proof of delivery.
How escrow handles your deposit in Washington
Who holds the funds
In Washington, a neutral third party typically holds earnest money. This is usually a licensed title or escrow company, or in some cases a brokerage trust account. Funds are placed in a client trust account and held until closing or until both parties instruct otherwise in writing.
How you deposit funds
Common forms include cashier’s check, personal check, wire transfer, or approved electronic transfer. The escrow or title company will issue a receipt and notify both parties once funds are deposited.
Wiring safety tips
Wire fraud targets real estate transactions. Protect yourself with these steps:
- Independently verify wiring instructions using a phone number from the escrow company’s official website or your prior closing packet.
- Do not rely only on emailed instructions, even if they look legitimate.
- Consider in‑person delivery of a cashier’s check if available and practical for you.
Release and closing
At closing, your deposit is credited toward your funds to close. Before closing, escrow can release funds only under the contract terms or with a mutually signed release. If there is a dispute, funds are held until both parties agree in writing or a court order resolves it.
Use earnest money to strengthen your offer
A thoughtful deposit can help your offer stand out without adding unnecessary risk.
Ways to signal strength
- Offer a larger deposit, while keeping inspection and financing contingencies in place.
- Deliver the deposit quickly. Short deposit timelines can convey commitment.
- Pair your deposit with a strong preapproval letter and a realistic closing schedule.
Options to discuss with your agent
- Modest deposit with full protections. Good for buyers who value flexibility and due diligence.
- Larger deposit with standard protections. Often used to look competitive without removing key safeguards.
- Aggressive terms with higher risk. Only consider reduced protections if you fully understand the downside and have the funds and appetite for potential loss.
Your next steps in Spokane
- Decide your comfort range for the deposit after reviewing your budget and risk tolerance.
- Ask your Spokane agent for current norms in your price band and neighborhood.
- Confirm where the funds will be held and how you will receive a deposit receipt.
- Line up inspection scheduling and lender timelines before you write the offer so your contingencies are realistic.
If you want hands‑on guidance, reach out to the local team that treats your purchase like a concierge experience. Connect with Lifestyle North Realty to plan a smart offer strategy for Spokane.
FAQs
How much earnest money do Spokane buyers usually pay?
- Many buyers start around 1 to 3 percent of the price or a flat few thousand dollars on average‑priced homes, with larger deposits common in competitive or higher‑price segments.
When can a Spokane buyer get earnest money back?
- If you cancel within your contract’s contingencies and meet the notice deadlines, you typically receive a refund. If you cancel after protections expire, you risk forfeiture.
Who holds earnest money in Washington purchases?
- A neutral title or escrow company, or sometimes a brokerage trust account, holds funds in a client trust account until closing or written release.
What is the deadline to deposit earnest money?
- Your contract sets the deadline, often within 1 to 3 business days after acceptance. Deliver on time and keep the receipt.
How do I avoid wire fraud when sending my deposit?
- Verify wiring instructions by calling the escrow company using a number from its official website, not from an email. When in doubt, use a cashier’s check in person.
Can I make earnest money non‑refundable to win a bidding war?
- You can offer that, but it increases risk. Only consider it after you understand the consequences and discuss alternatives with your agent.
What happens to earnest money at closing?
- It is credited toward your closing costs or down payment as part of your funds to close.
