Buying a home in Spokane and heard you’ll need “earnest money”? You’re not alone. This small but important deposit can help your offer stand out and also protect you if things don’t go as planned. When you understand what it is, how much to offer, and when it’s refundable, you can write a confident, competitive offer without taking on unnecessary risk. Let’s dive in.
What earnest money is
Earnest money is a good‑faith deposit you put down after your offer is accepted. It shows the seller you’re serious and gives both sides a financial reason to follow the contract. If you close, the deposit is credited toward your down payment and closing costs. If you do not close, what happens to the money depends on your contract and whether you used your contingencies correctly.
Your purchase and sale agreement will spell out the amount, who holds the funds, the delivery deadline, and when the money can be released.
Typical amounts in Spokane
There isn’t one “right” number for every home. Local supply and demand, price point, and whether you’re competing with other offers all influence your deposit.
- In calmer markets, sellers may accept smaller flat amounts, such as 1,000 to 5,000 dollars.
- In competitive situations, you may see deposits in the range of 1 to 3 percent of the price, or higher for cash buyers who want to stand out.
Here are practical examples for mid‑priced Spokane homes:
- On a 300,000 dollar home: 2,000 to 6,000 dollars (about 0.7 to 2 percent)
- On a 500,000 dollar home: 5,000 to 10,000 dollars (about 1 to 2 percent)
Customs change with the market. Local monthly reports from the Spokane Association of REALTORS and Washington REALTORS can signal how competitive conditions are, which often affects earnest money expectations.
Who holds your deposit and when it’s due
In Washington, earnest money is typically held by an escrow or title company named in your contract. Some contracts use a brokerage trust account or another agreed escrow holder, but that is less common. You should receive a written receipt after the deposit is delivered.
Most contracts require delivery within a short window after both sides accept the offer, often 24 to 72 hours. The exact deadline is negotiable and appears in your purchase agreement.
How to deliver funds
- Cashier’s check
- Personal check (more common for smaller deposits)
- Wire transfer or electronic ACH to the escrow or title company
Follow the escrow company’s instructions exactly, and keep copies for your records.
Protect yourself from wire fraud
Wire fraud is a real risk in real estate. Always verify wire instructions by calling the escrow or title company using a trusted phone number from your contract or their official materials. Do not rely on email instructions alone. Ask for written confirmation when the funds arrive.
When you can get it back
Earnest money is usually refundable if you cancel within a valid contingency window stated in your contract. Common buyer protections include:
- Inspection contingency. You can inspect the home and either negotiate repairs or cancel within the inspection period. Many buyers use a 7 to 10 day window.
- Financing contingency. If you cannot obtain loan approval by the stated date and you have not waived this protection, you may cancel and receive your deposit back.
- Appraisal contingency. If the appraisal comes in below the price and no agreement is reached, you can cancel within the contingency terms.
- Title, HOA document review, and other feasibility items. If the contract includes these protections and you exercise them on time, the deposit is typically refundable.
Key point: You must act within your deadlines and follow the contract steps to keep your refund rights.
When you could lose it
You risk losing your earnest money if you breach the contract or miss deadlines without a valid contingency in place. Examples include canceling for a reason not covered by a contingency or failing to perform by required dates. If a buyer defaults, the seller may be entitled to keep the deposit and could seek additional remedies depending on the contract.
If the seller breaches, such as being unable to provide clear title, you may be entitled to a return of your earnest money and possibly other remedies as outlined in the agreement.
How it applies at closing
If you close, your earnest money is credited on the final settlement statement toward your down payment and closing costs. The escrow or title company tracks this from your initial receipt through closing, so the credit appears on your Closing Disclosure.
If you validly terminate under a contingency, the escrow holder returns your deposit per the contract.
Spokane offer strategies: strong and safe
You want to look serious without overexposing yourself to risk. Here are two examples you can tailor to market conditions:
Conservative approach (common for first‑time buyers)
- Earnest money: around 1 percent of the price, or a flat 2,000 to 5,000 dollars on lower‑priced homes
- Inspection contingency: 10 days
- Financing contingency: aligned with your lender’s timeline
- Appraisal contingency: included
This signals commitment while keeping standard protections.
Competitive approach (for hot listings or multiple offers)
- Earnest money: higher, such as 1 to 2 percent or a strong flat amount
- Inspection contingency: shorter window, about 7 days
- Financing and appraisal: keep protections but tighten dates to show confidence
Some cash buyers consider waiving certain contingencies, but that raises risk. Only consider reducing or waiving protections if you fully understand the potential outcomes and are comfortable with them.
Step‑by‑step: from offer to deposit
- Agree on terms. Your offer includes the earnest money amount, who holds it, and the delivery deadline.
- Mutual acceptance. Once both parties sign, the clock starts on your deposit delivery and contingency timelines.
- Deliver funds. Send the deposit by the method in the instructions, then confirm the escrow holder received it and obtain a receipt.
- Complete inspections. Use the inspection period to evaluate the property and negotiate or cancel within the deadline.
- Finalize financing and appraisal. Keep your financing and appraisal timelines aligned with your lender to avoid last‑minute issues.
- Close or cancel per contract. At closing, your deposit is credited. If you cancel under a valid contingency, the escrow holder returns your funds.
Common mistakes to avoid
- Over‑promising your deposit in a shifting market. A huge deposit does not replace strong terms and clear timelines.
- Missing contingency deadlines. Put the dates on your calendar and work backward.
- Wiring funds without verification. Always call a trusted number to confirm instructions.
- Waiving protections you still need. If you rely on financing or need an appraisal, keep those contingencies intact.
- Assuming “customary” terms apply to every deal. Spokane norms can vary by neighborhood, price point, and season.
Local cues that affect your amount
- Active inventory and days on market. Tighter supply often means stronger deposits.
- Price of the property. Higher prices often see higher absolute deposit amounts.
- Your financing. Cash buyers may use larger deposits to stand out; financed buyers can still look strong with clear, realistic timelines and standard protections.
- Listing agent expectations. Your buyer’s agent can ask what the seller values most and tailor your offer accordingly.
Bottom line for Spokane buyers
Earnest money is a powerful signal in your offer and a key part of your protection plan. Choose an amount that matches market conditions and your comfort level, deliver it on time, and use your contingencies wisely. With the right structure, you can stay competitive and protect your deposit.
If you want help tailoring an earnest money strategy to today’s Spokane market, reach out to the local team that blends warm, relationship‑first service with proven results. Schedule your time with A‑Team Real Estate to get started.
FAQs
How much earnest money do Spokane buyers usually put down?
- It depends on price and competition. You’ll often see 1,000 to 10,000 dollars or about 1 to 3 percent of the price, with higher amounts in multiple‑offer situations.
Who holds my earnest money in Spokane?
- Typically an escrow or title company named in your contract, which will issue a receipt when funds are deposited.
When is my earnest money refundable?
- If you cancel within a valid contingency period, such as inspection, financing, or appraisal, your deposit is generally refundable per contract terms.
How soon after acceptance do I need to deposit the funds?
- Your contract sets the deadline. Many Spokane deals require delivery within 24 to 72 hours after mutual acceptance.
Can the seller use my earnest money before closing?
- No. The funds are held in escrow and applied at closing or released according to the contract.
What happens if I back out without a contingency?
- If you cancel for a reason not covered by your contingencies, the seller may be entitled to keep the earnest money and may seek additional remedies under the contract.
