Buying a home in Spokane comes with a few new terms, and earnest money is one of the most important. If you have questions about how much to put down, when it is refundable, and how to protect yourself, you are not alone. A clear plan can help you write a stronger offer without taking on unnecessary risk. This guide walks you through what earnest money is, typical Spokane amounts, refund rules, and practical tips to keep your funds safe. Let’s dive in.
What earnest money is
Earnest money is a deposit you provide with your offer to show you are serious about buying. It becomes part of your purchase contract and is typically held by a neutral escrow or title company until closing. If you close, the deposit is credited toward your down payment and closing costs.
For sellers, the deposit shows commitment and reduces the chance of a buyer backing out for no reason. For you, the right deposit and clear terms can make your offer more attractive while keeping your protections in place through contingencies and deadlines.
How refunds and risk work
Whether your earnest money is refundable depends on the contract language and timing. Most purchase agreements include contingencies such as inspection, financing, appraisal, and title or HOA review. If you cancel within a valid contingency period and follow the notice rules in the contract, your deposit is typically refundable.
Your deposit is at greater risk if you miss a deadline, remove contingencies and later cannot close, or terminate for a reason not covered by the contract. Some forms include a liquidated damages clause that allows a seller to keep the deposit if the buyer defaults, subject to the contract and dispute rules. Always track dates closely and follow the exact notice steps in writing.
Typical earnest money in Spokane
Spokane is generally less expensive than Seattle-area markets, and deposit sizes here are often smaller on a dollar basis. The amount you choose should reflect price point and current conditions.
- Entry-level homes under about $300,000: many buyers offer around $1,000 to $3,000.
- Mid-range homes $300,000 to $600,000: common deposits are about $3,000 to $10,000, or roughly 1 percent of the purchase price as a simple gauge.
- Higher-priced and luxury: deposits can be several percent of the price, especially in competitive situations.
These are typical ranges, not rules. In multiple-offer moments, some buyers raise the deposit or use a staged deposit structure. In balanced markets, modest deposits are common.
Who holds your deposit in Spokane
In the Spokane area, title or escrow companies often hold earnest money in a trust account. Sometimes a brokerage trust account is used. You will receive a receipt after the deposit is recorded, and the escrow holder will follow the purchase agreement and escrow instructions to release funds at closing or upon mutual agreement if the contract ends.
Common payment methods include personal check, cashier’s check, certified check, or wire transfer. Your contract will specify when the initial deposit is due and whether any additional deposit is required later.
Wire safety and fraud prevention
Wire fraud is a real risk in real estate. Protect your funds with a few simple steps:
- Verify wiring instructions by calling the escrow or title company using a phone number you obtain independently.
- Confirm the account details before sending funds, and request confirmation once they receive your wire.
- Do not click links in unsolicited emails that claim wiring instructions have changed.
- Keep all receipts and confirmations.
Smart ways to strengthen your offer
You can write a competitive offer without putting your deposit at unnecessary risk. Consider these approaches:
- Choose a reasonable deposit size. Make it strong enough to show commitment, but not so large that you would be exposed if a contingency fails.
- Use staged deposits. Start with a smaller amount at mutual acceptance and add more when contingencies are removed. Example: $3,000 at acceptance with another $7,000 due after inspection and financing are satisfied.
- Shorten contingency periods prudently. If you can complete inspections or lender milestones faster, a shorter timeline can help. Avoid deadlines that rush you past proper due diligence.
- Be cautious with nonrefundable terms or waived contingencies. These can win bids in hot markets, but they significantly increase risk. Understand the tradeoffs before committing.
Key contract details to review
Your purchase agreement controls how your deposit is handled. Review these items carefully with your agent and lender:
- Escrow holder and deposit instructions: the exact title or escrow company and how you will deliver funds.
- Deposit schedule: the initial and any additional deposits with clear due dates.
- Contingencies and deadlines: inspection, financing, appraisal, and title or HOA review, including how and when notice must be delivered.
- Appraisal shortfall language: whether you must cover a gap, can renegotiate, or can terminate with a refund.
- Liquidated damages and default remedies: whether the seller can keep the deposit as the exclusive remedy and under what conditions.
- Dispute resolution and release: whether funds require mutual agreement, mediation, arbitration, or a court order to release in a dispute.
A simple buyer checklist
Use this quick checklist when preparing your offer in Spokane:
- Confirm current market conditions with your agent and align your deposit size with your price point.
- Select a reputable title or escrow company and obtain deposit instructions directly from that office.
- Set realistic inspection and financing periods that match your needs and lender timelines.
- Track all contract dates and keep copies of every written notice and report.
- Coordinate with your lender early so your deposit and cash to close are documented for underwriting.
- Get a written receipt for your deposit and confirm where the funds are held.
What happens if there is a dispute
If both parties agree in writing, the escrow holder can release the funds based on that agreement. If there is a disagreement, the escrow or title company will usually hold the funds until the contract’s dispute process plays out. Options may include mediation, arbitration, or a court order, depending on the forms and instructions you signed. Keep detailed records, including inspection reports and all notices, to support your position if needed.
Final thoughts
Your earnest money is a powerful part of your offer in Spokane. When you set the amount thoughtfully, follow your contract deadlines, and use protections that fit your situation, you can write a strong offer while keeping risk in check. If you want personalized guidance on deposit size, timelines, and strategy for your price point and neighborhood, reach out to a local expert.
Have questions about your specific situation or a home you want to pursue? Connect with Katie McDaris Marks to talk through options and build a confident plan.
FAQs
How much earnest money do Spokane buyers usually put down?
- Typical ranges vary by price point. Entry-level homes often see about $1,000 to $3,000, mid-range homes about $3,000 to $10,000 or roughly 1 percent, and higher-priced homes can be several percent depending on competition.
When is earnest money refundable in Washington purchase contracts?
- It is generally refundable if you cancel within a valid contingency period, deliver written notice on time, and follow the procedures in your purchase agreement.
Who holds earnest money in Spokane real estate transactions?
- A title or escrow company commonly holds funds in a trust account until closing or release, though a brokerage trust account may be used in some cases.
Can I use a personal check for my earnest money deposit?
- Many Spokane-area escrow and title companies accept personal checks, cashier’s checks, certified checks, or wires. Confirm accepted methods and timing with your escrow holder.
What puts my earnest money at risk of forfeiture?
- Missing deadlines, removing contingencies and later failing to close, or terminating for reasons not covered by the contract can put your deposit at risk.
How can I make my offer competitive without risking my deposit?
- Use a reasonable deposit size, consider staged deposits, set realistic but efficient contingency timelines, and avoid waiving protections unless you fully understand the risks.
