You finally found a home you love in La Center. Now your agent asks, “How much earnest money do you want to put down?” If you are not sure what that means, you are not alone. In Washington, the earnest money deposit is a simple idea with important rules. In this guide, you will learn what it is, how it works, how much to offer, when it is refundable, and how to protect it so you can move forward with confidence. Let’s dive in.
What earnest money is
Earnest money is a good faith deposit you include with your purchase offer to show the seller you are serious. It helps bind the contract while you work through contingencies like inspection and financing. If the sale closes, that deposit is credited to your down payment or closing costs. If the sale does not proceed under allowed contract terms, the deposit may be returned to you or kept by the seller, depending on the agreement.
How it works in Washington
Where your deposit goes
In Washington, the purchase and sale agreement names an escrow or title company to hold the deposit. You deliver the earnest money to that company, and it is placed in a trust or client account under state rules. The contract identifies who holds the funds and includes instructions for how they can be released.
When you deliver it
Your contract sets the deposit due date. It often reads “upon mutual acceptance” or gives a certain number of business days after acceptance. If you miss the deadline, the seller may have remedies that are spelled out in the contract.
How it shows up at closing
If you close, the earnest money is shown as a credit on your settlement statement. It reduces what you need to bring to closing for your down payment or closing costs. If you cancel under a valid contingency within the time allowed, the deposit is usually returned according to the contract instructions.
How much to offer in La Center
There is no single right amount for La Center or Clark County. In many Washington markets, deposits commonly range from about 1 to 3 percent of the purchase price, and some first‑time buyers use a flat amount such as $1,000 to $5,000. The size often reflects price point, the property’s demand, and how competitive the market is on the day you write your offer.
In a hot seller’s market, a larger earnest deposit can help your offer stand out. In a slower market, a smaller deposit may be acceptable. Work with your agent to size the deposit based on the specific home, neighborhood dynamics, and your overall terms like closing date and contingencies.
Contingencies that protect you
Refundability depends on the contract and timing. Most buyers include contingencies that let them cancel within set windows and keep their earnest money. Common protections include:
- Inspection contingency. Gives you time to inspect, request repairs, or cancel within the period.
- Financing or mortgage contingency. Protects you if your loan is not approved under the contract terms by the stated deadline.
- Appraisal contingency. Helps if the home appraises below the price and you cannot resolve the gap.
- Title or survey contingency. Covers title problems the seller cannot cure.
- Home sale contingency. Allows you to cancel if you cannot sell your current home in time. These are often time‑limited and can be less attractive to sellers.
- Review of disclosures and HOA documents. Gives you a window to review and cancel if needed.
If you cancel within a valid contingency period and follow the notice rules in the contract, the deposit is typically returned. Once you waive a contingency in writing, you usually cannot rely on it later to recover your deposit.
When it can be nonrefundable
Earnest money can become nonrefundable in a few scenarios, depending on your agreement:
- You remove contingencies, then back out without a contractual reason.
- You miss a deadline or otherwise default under the purchase agreement.
- You agree to a clause that makes some or all of the deposit nonrefundable. These are less common and must be clear in the contract.
Here are two quick examples:
- You cancel within the inspection period after discovering a major issue. Outcome: deposit is generally returned per the contract.
- You waive the financing contingency to win a bidding war, then your loan is denied. Outcome: you may forfeit the deposit because you no longer have financing protection.
The exact outcome always depends on the purchase and sale language you signed.
Deadlines and documentation
Missing a date is a common way buyers put their deposit at risk. Use this simple checklist to stay in control:
- Calendar all contingency deadlines the day your offer is accepted.
- Confirm the deposit due date and delivery method in writing.
- Get a dated receipt from the escrow or title company for your earnest money.
- Keep copies of all addenda showing you removed or extended contingencies.
- Ask your agent to confirm every notice was delivered exactly as the contract requires.
Who holds and releases funds
Escrow or title companies hold the funds and follow written instructions. They usually release earnest money only when both parties sign off, or when they receive a court order or other lawful resolution. If there is a dispute, many contracts call for mediation or arbitration. Escrow will often keep the funds until the dispute is resolved or both sides provide matching written instructions.
If conflict arises, review your contract’s remedy and dispute sections, involve your agent, and notify the escrow holder. If needed, speak with an attorney about your options and the best path forward.
Local tips for La Center buyers
Choosing the right amount and timing can strengthen your position without adding unnecessary risk. Keep these local, practical tips in mind:
- Size your deposit strategically. Consider price point, how many offers you expect, and the rest of your terms like closing timeline and inspection window.
- Be precise with deadlines. Build realistic windows for inspection, appraisal, and financing so you do not rush and risk default.
- Verify the escrow holder. Confirm the title or escrow company named in the contract and contact them directly through a verified phone number.
- Guard against wire fraud. Before wiring funds, call the escrow company using a number you independently find, not one from an email. Follow any secure portal steps they provide.
- Keep earnest money separate from closing funds in your planning. The deposit is a credit at closing, not an extra fee, so you still need to budget for your down payment and closing costs.
- Pause before agreeing to “nonrefundable” early in negotiations. Understand the risk and get advice before accepting such terms.
How sellers view earnest money
Sellers see larger, cleanly documented deposits as a sign of commitment. A strong earnest deposit, clear proof of funds, and on‑time delivery can make your offer more compelling. If you also keep contingency timelines short and realistic, you present the kind of offer many sellers prefer.
How your agent helps
A skilled local agent does more than fill in blanks. Your agent helps you choose the right deposit amount for the property, sets realistic timelines, drafts precise contingency language, and keeps all notices on schedule. They also coordinate with escrow, verify wiring instructions, and make sure you have the documentation you need if the offer changes.
Ready to write a confident offer in La Center or anywhere in Clark County? Connect with LeAnne Moore for clear guidance on earnest money, contingency strategy, and offer strength.
FAQs
What is earnest money in Washington real estate?
- It is a good faith deposit you put down with your offer that shows commitment, is held by escrow, and is credited to you at closing if the sale completes.
How much earnest money should I offer in La Center?
- Many buyers use about 1 to 3 percent of the price, or a flat $1,000 to $5,000 for lower price points, adjusted to the home and market conditions.
When do I pay earnest money in Washington?
- Your contract sets the due date, often at mutual acceptance or within a few business days, and you deliver funds to the named escrow or title company.
Who holds earnest money in Clark County?
- A title or escrow company named in your purchase and sale agreement holds the funds in a trust or client account under state rules.
What contingencies protect my earnest money?
- Common ones include inspection, financing, appraisal, title, home sale, and review of disclosures or HOA documents, all with strict deadlines.
When could I lose my earnest money in Washington?
- If you default, miss deadlines, or back out after removing contingencies without a contractual reason, the seller may be entitled to keep the deposit.
Can a seller keep my deposit if they accept a better offer?
- Your signed agreement controls. If both parties remain bound and you are not in default, sellers cannot simply take your deposit to pursue another offer.
How does earnest money show on my closing statement?
- It appears as a credit that reduces the cash you must bring to closing for your down payment and closing costs.
What if escrow misapplies or loses my earnest money?
- Contact your agent and the escrow holder immediately, review the contract instructions, and seek legal guidance to resolve and recover funds.
How do I avoid wire fraud when sending earnest money?
- Always verify wiring instructions by calling the escrow company using a verified phone number you obtain independently, not one from an email.
