How much earnest money should you put down on a Spokane home, and what makes it safe or at risk? If you are planning to buy in Spokane or Spokane County, this question comes up fast once your offer is accepted. You want to show sellers you are serious without exposing yourself to unnecessary risk.
In this guide, you will learn what earnest money is, typical Spokane amounts, when it is refundable, and the timelines and steps that matter most. You will also get clear scenarios and a simple checklist to protect your deposit. Let’s dive in.
Earnest money basics
Earnest money is a deposit you make after a seller accepts your offer. It shows good faith that you plan to complete the purchase. At closing, it is applied to your down payment or closing costs.
The deposit is usually held by an escrow or title company, or sometimes in a listing brokerage trust account, according to the purchase and sale agreement. The agreement also sets deadlines, who holds the funds, and how they can be released. In Spokane, standard Washington forms commonly used by agents specify the timing and the escrow instructions that control the deposit.
If you follow the contract and close, your earnest money is part of your buyer funds due at closing. If you do not close, what happens next depends on your contingencies and whether you met all notice and timing requirements.
How much in Spokane
In the Spokane area, many offers use deposits from a few hundred to several thousand dollars. For higher-priced homes, buyers often use a percentage, typically 1 to 3 percent of the purchase price.
In a competitive market, you might offer a larger deposit to stand out. In a slower market, sellers may accept lower amounts. The right number depends on price point, competition in the neighborhood, and your risk tolerance.
Quick budgeting examples (illustrative only):
- $300,000 purchase: 1 percent is $3,000. Many buyers offer $1,000 to $5,000 depending on competition.
- $500,000 purchase: 1 percent is $5,000. A stronger offer might use 2 percent, or $10,000.
A practical rule of thumb: plan an amount that is meaningful to the seller and affordable for you if you breach the contract. For most buyers, that means setting aside several thousand dollars as part of offer planning.
Refund rules and contingencies
The big picture is simple. Your earnest money is refundable if you use your contract rights to terminate within your contingency deadlines. It is usually not refundable if you breach the contract without a termination right.
Contingencies that protect you
When exercised on time with proper written notice, these common protections typically allow a refund:
- Home inspection: If you discover issues and cancel within the inspection period, you can usually recover your deposit.
- Financing: If your loan is not approved by the financing deadline and you terminate properly, your deposit is typically returned.
- Appraisal: If the property appraises below the purchase price and you cannot resolve it, you can often cancel and get a refund if your contract includes appraisal protection and you follow notice steps.
- Title: If title problems cannot be fixed, you can terminate and receive your deposit back.
- Sale of buyer’s home: If your offer depends on selling your current home and that contingency is not met, the terms usually allow a refund.
When earnest money is not refundable
You are at risk of losing your deposit if any of the following occur:
- You default or fail to close for reasons not covered by a contingency.
- You waive a contingency, then cannot close.
- You miss a deadline or fail to send the required written notice on time.
- Your contract includes a liquidated damages clause and you breach. Many Washington contracts allow the seller to keep the earnest money in this case, depending on the clause and context.
How refunds are released
If you terminate under a valid contingency, you will need to follow the notice process and request release of funds from escrow. If the seller agrees, escrow can release the deposit according to the written instructions. If there is a dispute, escrow typically needs a mutual agreement, a court order, or arbitration to release funds. If escrow is uncertain, it may interplead the funds and ask the court to decide.
Timelines and steps
You keep refund rights by following the contract exactly. Here is a Spokane-focused timeline to use as a starting point. Actual dates and deadlines are set in your purchase agreement.
Before your offer:
- Review earnest money strategy with your agent based on the neighborhood and current competition.
- Get a full pre-approval so your financing contingency is strong and timelines stay on track.
At mutual acceptance:
- Deposit delivery: Many contracts require delivery to escrow within 1 to 3 business days. Check your agreement for exact timing.
- Confirm who holds the funds and how they must be delivered.
Contingency windows (typical ranges):
- Inspection: Often 7 to 10 calendar days.
- Financing: Often 21 to 30 days to obtain lender commitment.
- Appraisal: Usually tied to the financing timeline.
- Title review: Typically within the first weeks after acceptance.
If an issue arises:
- Inspect quickly and provide any required written notice within the deadline.
- If you negotiate repairs or credits, put it in writing signed by both parties.
At closing:
- Your earnest money applies to your down payment or closing costs.
Protect your deposit
A few simple habits can make a big difference.
- Track every deadline. Put inspection, financing, appraisal, and title dates on your calendar and set reminders.
- Use proper forms. Standard Washington forms help clarify timelines and notice steps.
- Send notices in writing. Follow the contract’s exact instructions for delivery and timing.
- Document your file. Keep receipts, escrow deposit confirmations, inspection reports, and lender communications. If you rely on a financing contingency, get the lender denial in writing.
- Fund on time. Deliver your deposit within the required window and confirm escrow’s receipt.
- Align expectations. If you plan to waive protections to be competitive, weigh that risk carefully and budget accordingly.
Spokane scenarios
These examples show how outcomes often play out. They are illustrative only.
- Scenario A: You include inspection and financing contingencies. An inspection reveals significant defects. You send the proper notice within the inspection period. Your earnest money is typically refundable.
- Scenario B: You waive inspection to win a bidding war, then discover issues later and cannot close. Without a termination right, your deposit is at a higher risk of being forfeited.
- Scenario C: You are a cash buyer using a large deposit to stand out. Your offer is stronger, but the deposit is still governed by the contract unless you waive protections. If you breach, the risk of losing a larger deposit is greater.
Disputes and local practice
Escrow and title companies in Spokane are neutral. They follow written escrow instructions, mutual releases, or a court order. If the buyer and seller do not agree, escrow may require mediation or arbitration, or file an interpleader so a court can decide.
Some brokerages hold deposits briefly in a trust account, though it is common to move funds to the escrow or title company per contract instructions. Many Washington contracts also include a liquidated damages clause that can allow the seller to keep the deposit if the buyer breaches, depending on the specific language and circumstances.
If a seller refuses to release funds after you terminated properly and on time, or if a large sum is at stake, consider consulting a Washington real estate attorney. Clear records and on-time notices are your best defense in any dispute.
Budgeting beyond the deposit
Your offer plan should include earnest money plus related costs that keep your protections intact.
- Inspections: Set aside funds to complete inspections within the deadline.
- Appraisal and financing: Build in time and resources to meet lender requirements and stay within the financing window.
- If you consider waiving protections: Budget for potential appraisal gaps or repair risks since your deposit may be at higher risk if you cannot close.
A simple approach is to plan for several thousand dollars of earnest money plus funds for inspections and lender-related items. Then confirm exact deposit timing and delivery details with your agent and escrow company once your offer is accepted.
Final thoughts
Earnest money shows sellers you are serious. It also introduces risk that you can manage with clear contingencies, careful timing, and good documentation. With a thoughtful strategy, you can make a strong offer in Spokane while keeping your deposit as safe as possible.
If you want a Spokane-focused plan for your price range and neighborhood, reach out to a local team that knows the forms, the timelines, and the market rhythm. Connect with BranDen Tipton to map out your deposit strategy and next steps.
FAQs
How much earnest money is typical for Spokane buyers?
- Many buyers offer a few hundred to several thousand dollars on lower-priced homes, and 1 to 3 percent of the price on higher-priced properties, adjusted for market competition.
Is earnest money separate from my down payment?
- Yes. It is a deposit made after mutual acceptance and is applied to your down payment or closing costs at closing if the transaction completes.
When do I have to deliver my earnest money in Spokane?
- Many contracts require delivery to escrow within 1 to 3 business days after mutual acceptance, but you must follow the exact timing in your purchase agreement.
Can I get my earnest money back after a bad inspection?
- Often yes, if your contract includes an inspection contingency and you send the required written notice within the inspection period.
Who holds earnest money in Spokane transactions?
- Typically an escrow or title company, or sometimes the listing brokerage’s trust account, as specified in the purchase agreement and escrow instructions.
What if the seller will not release my deposit after I terminate properly?
- Escrow may require a mutual release, court order, or arbitration. If there is a dispute, escrow can interplead the funds so a court can decide; consider consulting an attorney.
