What Earnest Money Covers in Seattle

Buying in Seattle or the Eastside and hearing a lot about “earnest money”? You are not alone. That deposit can feel confusing, especially when timelines move fast and offers are competitive. In this guide, you will learn what earnest money covers, how much is common in King County, when it is due, when it is refundable, and how to protect it from contract or wire-fraud risks. Let’s dive in.

Earnest money basics

Earnest money is a good-faith deposit you deliver after your offer is accepted. It shows the seller you are serious. If the sale closes, the deposit becomes part of your funds at closing and is applied to your down payment and closing costs.

It is different from your down payment, which you pay at closing. It is also different from any lender fees or due diligence fees, which are separate. Earnest money is held in escrow and is governed by the purchase and sale agreement’s terms.

Typical amounts in Seattle and the Eastside

Seattle and Eastside markets are often competitive, which can push amounts higher than national norms. What you offer depends on price point and market conditions.

Common ranges you will see:

• Entry-level homes: typically 5,000 to 15,000 dollars.
• Mid-priced homes: often 10,000 to 40,000 dollars.
• Higher-priced and luxury: commonly 1 to 3 percent of the purchase price, sometimes higher in intense bidding.

Some buyers use a flat amount, while others use a percentage that scales with price. Your agent will help you match the amount to current conditions and your risk tolerance.

When you pay and key timelines

Most Washington contracts start timelines on the date of mutual acceptance. That is the day both parties sign the accepted offer.

• Earnest money delivery: commonly due within 1 to 3 business days after mutual acceptance. Two business days is a frequent standard. If you miss the deadline without an agreed extension, you may be in breach.
• Inspection contingency: often 7 to 10 days. Investors may shorten, and some buyers waive it in hot markets.
• Financing contingency: commonly 21 to 30 days for conventional loans. Appraisal is usually tied to this window.
• Title review: you will have a short period to object after receiving the title commitment, per the contract.
• Closing: financed purchases often close in 30 to 45 days; cash purchases can close in 7 to 14 days if title work is ready.

While contingencies are active, you can usually cancel under the contract’s rules and recover your deposit. Once you remove key contingencies, your ability to recover earnest money is limited.

What earnest money covers vs. not

What it covers at closing

If the sale closes, your earnest money is credited toward your required funds. Think of it as an early portion of what you will bring to the closing table.

What it does not cover

• It is not an extra fee to the seller when you close.
• It does not replace your down payment or lender-required reserves.
• It does not automatically cover every issue that arises during the transaction. Your contract controls how and when funds can be released.

Refunds, defaults, and disputes

You generally get your earnest money back if you cancel within a valid contingency period and follow the contract’s steps. That can include delivering timely written notice and any required documents, like an inspection report or a lender denial letter.

A seller may claim the deposit if you default after contingencies are removed or fail to close under the contract. Many contracts include a liquidated damages clause, which can limit the seller’s remedy to keeping the earnest money. If there is a disagreement, escrow often will not release funds without written consent from both parties or a court or arbitrator’s decision.

To protect your refund rights, meet deadlines precisely, give notices in writing as the contract requires, and keep copies of all communications and receipts.

Where funds are held and how they are protected

In King County, earnest money is most often held by a title or escrow company that is licensed and regulated in Washington. Sometimes a brokerage client trust account holds the funds, following strict trust accounting rules. You should receive a deposit receipt, and funds are kept in insured bank accounts according to escrow instructions.

Wire-fraud is a known risk. Confirm wire instructions by calling your escrow or title company using a phone number you obtain from a verified source, not from an email. Be wary of last-minute changes, and always verify account details by phone before sending funds.

Buyer checklist: Seattle and Eastside

Before you write an offer:

• Choose an earnest money amount that fits local norms and your risk comfort.
• Decide which contingencies to include and how long each should run.
• Have your agent state the deposit deadline and recipient clearly in the offer.

After mutual acceptance:

• Deliver the deposit on time by the method in the contract. Save your receipt.
• Confirm the escrow or title company received the funds and request written confirmation.
• Verify wire instructions by phone using a known, trusted number before sending any wire.

During contingencies:

• Track inspection, financing, appraisal, and title deadlines closely.
• If you plan to cancel, deliver written notice within the window and keep documentation.

Before closing:

• Ask escrow how your earnest money will be credited and request a final accounting.

If a dispute arises:

• Contact your agent right away. Preserve all emails, texts, notices, and receipts.
• Expect escrow to hold funds until both parties sign a release or a decision is reached.

What to verify with your agent

Your agent should confirm these items in writing so everyone is aligned:

• Who holds the deposit (escrow/title company or brokerage trust) and full contact details.
• Deposit deadline and acceptable delivery methods, like wire or cashier’s check.
• The escrow/title company’s licensing status.
• Anti-fraud procedures and how to verify wire instructions.
• Who must sign escrow instructions and under what conditions funds can be released.
• Whether your contract includes liquidated damages language and how it works.
• How your brokerage documents receipt and whether it ever holds funds itself.

Local trends to watch

In stronger seller markets, buyers often offer higher earnest money, shorten contingency periods, or waive some protections. That can increase risk. In cooler periods, sellers may accept lower deposits and longer contingencies.

Lenders still require documentation of your deposit’s source, such as bank statements or gift letters. Title and escrow teams can be very busy in hot markets, so timely deliveries and clear communication help you avoid delays.

Ready to buy with confidence?

You deserve a guide who explains each step and protects your interests. If you are planning a Seattle or Eastside purchase, let’s talk through earnest money strategy, timelines, and risk so you can write a strong, smart offer. Reach out to The Koi Group to get personalized guidance for your next move.

FAQs

What is earnest money in a Seattle home purchase?

• It is a good-faith deposit you deliver after mutual acceptance to show commitment, later applied to your down payment and closing costs if the sale closes.

How much earnest money is typical in King County?

• Entry-level homes often see 5,000 to 15,000 dollars, mid-range 10,000 to 40,000 dollars, and higher-priced properties commonly 1 to 3 percent of the price.

When is earnest money due after offer acceptance in Washington?

• It is commonly due within 1 to 3 business days after mutual acceptance, with two business days being a frequent standard.

When can I get my earnest money back in Seattle?

• You typically recover it if you cancel within a valid contingency period and follow the contract’s notice and documentation rules.

Who holds earnest money in Seattle and the Eastside?

• Most deposits are held by a licensed escrow or title company in an insured account; sometimes a brokerage trust account holds it under state rules.

How do I avoid wire-fraud when sending earnest money?

• Verify wire instructions by calling your escrow or title company using a trusted phone number, and confirm any changes by phone before sending funds.