You want your offer to stand out in Spokane Valley, but you also want to protect your cash. Earnest money plays a big role in both. It shows the seller you are serious and, when handled correctly, it reduces your risk. In this guide, you will learn what earnest money is, how much buyers here typically put down, when it is refundable, and how Washington contracts handle it. Let’s dive in.
Earnest money basics
Earnest money is a cash deposit you make after your offer is accepted. It signals good faith while you work through contingencies and move toward closing. At settlement, it is credited toward your cash to close, which can include your down payment and closing costs. The amount and handling are set by your Purchase and Sale Agreement.
Most deposits are held by a neutral third party. That can be the title or escrow company, or a broker’s trust account. The contract spells out where the funds go and how they will be disbursed at closing or if the contract terminates.
Typical amounts in Spokane Valley
Local practice often uses flat-dollar deposits rather than a strict percentage. For many resale homes in Spokane Valley, common deposits range from $1,000 to $5,000. In more competitive situations, buyers may target around 1 percent of the purchase price to strengthen an offer.
What you choose depends on market heat, price point, and your contingencies. Higher-priced properties and multiple-offer scenarios often push deposits higher. Keeping inspection and financing contingencies usually supports a more modest deposit, while waived contingencies can prompt sellers to expect more.
Spokane Valley examples
- Example A, mid-range home around $350,000: $2,000 to $4,000 is common. About 1 percent, or $3,500, can help in a competitive setting.
- Example B, entry-level home around $250,000: $1,000 to $3,000 is typical.
- Example C, higher-end home around $700,000: many buyers offer about 1 percent, or $7,000, and sometimes more if competition is strong.
How Washington contracts handle deposits
Washington buyers and sellers commonly use standard forms from Northwest MLS or Washington REALTORS. Your contract sets the deposit amount, who holds it, and your delivery deadline. A frequent timeline is delivery within 1 to 5 business days after mutual acceptance, with 3 business days being a common benchmark.
Funds are usually delivered to the named title or escrow company or to a brokerage trust account. On-time delivery matters. If the deposit is late or not delivered as agreed, the seller may have contract remedies that could put your offer at risk.
Refundable versus at risk
Your refund rights come from your contract contingencies and timelines. When you follow those timelines and the contract language, you typically protect your deposit.
Common refundable scenarios
- Inspection contingency: you cancel within the inspection period per the contract.
- Financing contingency: you cannot obtain financing and give the required notice before the deadline.
- Appraisal contingency: the appraisal is low and you cancel properly within the allowed window.
- Title issues: a title defect is not cured as allowed by the contract, and you terminate under the title clause.
- Sale-of-home or other agreed escape clauses: you cancel within the stated terms.
Situations where your deposit may be at risk
- You waive key contingencies, then walk away for reasons not protected by the contract.
- You fail to close by the agreed date without a contractual right to extend.
- You cancel for a reason not allowed by the contract.
- You do not deliver the deposit by the deadline.
Many Washington contracts include a liquidated damages clause that lets the seller keep the earnest money if the buyer defaults. The exact remedy depends on the forms and options used in your agreement.
Steps to protect your deposit
- Deliver on time: send your deposit to the named payee by the deadline and get a receipt.
- Track every deadline: inspection, appraisal, loan, title, and closing dates.
- Keep protections that fit your situation: inspection and financing contingencies can safeguard your funds when used properly.
- Use written notices: follow the contract instructions for canceling or requesting repairs.
- Document lender updates: communicate early if delays arise and follow the contract process for extensions.
- If a dispute arises: follow the contract’s dispute resolution steps. Escrow often needs signed instructions from both parties or a court order to release funds when there is a disagreement.
Spokane Valley scenarios to know
- Refundable: You offer $3,000 with a 10-day inspection. The inspection finds major structural issues. You terminate within the inspection period per the contract and receive your deposit back.
- At risk: You offer $3,000 and waive inspection. You later discover mold and decide to cancel. Without an inspection contingency, the deposit is likely forfeited unless the seller agrees otherwise.
- Financing protected: You include a financing contingency and provide required loan denial documentation before the deadline. Your deposit is refunded per the contract.
Choosing the right deposit amount
Start with your price point and the level of competition. For many Spokane Valley homes, $1,000 to $5,000 is common. If you expect multiple offers, consider moving closer to 1 percent of the purchase price, especially at higher price points.
Balance the deposit with your contingencies and comfort level. A larger deposit can add strength, but it also increases your exposure if protections are waived or deadlines are missed. Your agent can help you match the amount to market conditions and your goals.
Timeline checklist
- Offer accepted: confirm the deposit amount, payee, and deadline in your contract.
- Within 1 to 5 business days: deliver earnest money and get written confirmation.
- Inspection window: schedule inspections promptly and decide to request repairs or cancel within the timeline.
- Appraisal and financing period: track lender milestones and submit any required notices by the deadline.
- Pre-closing: verify clear-to-close and final details with escrow and your lender.
- Closing day: your deposit is credited toward your cash to close.
Final thoughts
Earnest money is a smart tool when you use it with clear timelines and the right protections. In Spokane Valley, most buyers succeed with a modest flat amount, adjusted for price and competition, and a plan to meet every deadline. With the right guidance, you can write a strong offer and keep your funds safe.
If you want help tailoring your deposit and contingencies to today’s Spokane Valley market, connect with Ray Cross to Schedule a Free Consultation.
FAQs
What is earnest money for Spokane Valley homebuyers?
- It is a good-faith deposit you make after offer acceptance that is held by escrow or a broker and credited to you at closing.
How much earnest money is typical in Spokane Valley?
- Many buyers put down $1,000 to $5,000, while competitive offers often target about 1 percent of the purchase price.
Who holds my earnest money in Washington?
- The contract specifies a title or escrow company or a brokerage trust account that will hold your funds until closing or termination.
When is earnest money refundable under Washington contracts?
- It is usually refundable if you cancel within a valid contingency period, such as inspection, financing, appraisal, or title per the contract.
What puts my earnest money at risk in Spokane Valley?
- Missing deadlines, waiving key contingencies, or canceling for reasons not allowed by the contract can lead to forfeiting the deposit.
How fast do I need to deposit earnest money in Washington?
- Many contracts require delivery within 1 to 5 business days after mutual acceptance, with 3 business days being common.
Can my earnest money count toward my down payment?
- Yes. At closing, your deposit is credited toward your down payment and closing costs.
