What Is Earnest Money and How Much Do You Need in Washington?
By Terry Leinneweber · June 15, 2026
Earnest money is the first check you write when buying a home. Here's how much you need, where it goes, and exactly when you can get it back.
What Is Earnest Money and How Much Do You Need in Washington?
The moment your offer is accepted, you're expected to write a check. Not to the seller, not to your lender, but to a third party holding account — and it's due within days.
That check is your earnest money deposit. Most first-time buyers know it exists but aren't sure how much to offer, where the money actually goes, or what happens to it if the deal falls apart.
Those are exactly the right questions to have answered before you make an offer, not after you're already under contract.
What Earnest Money Is
Earnest money is a good faith deposit that signals to the seller you're a serious, committed buyer. It's your financial skin in the game. When you submit an offer alongside an earnest money deposit, you're telling the seller that you intend to close, and that you're willing to put real money behind that intention.
The deposit is not a fee you pay to make an offer. It's not a non-refundable commitment the moment you write it. And it's not separate from your down payment in the way many buyers assume.
Here's how it actually works. Your earnest money goes into an escrow account held by the title company or escrow company managing the transaction. It sits there through the entire contract period. At closing, it's credited toward your down payment and closing costs. It's your money the whole time, it's just held by a neutral third party until the transaction resolves one way or another.
How Much Earnest Money Is Standard in Washington State?
There's no legal minimum for earnest money in Washington State. The amount is negotiated as part of the purchase offer, and what's considered competitive varies by market.
In most Washington markets, buyers offer between 1% and 3% of the purchase price as earnest money. On a $500,000 home, that's $5,000 to $15,000. In highly competitive markets like Seattle, Bellevue, or Kirkland, buyers sometimes offer more to make their offer stand out, particularly when competing against multiple offers.
The right amount depends on three factors. First, what's customary in the local market your agent is operating in. Second, how competitive the situation is. A multiple-offer environment calls for a stronger deposit than a home that's been sitting for 45 days. Third, how much you can genuinely put into escrow within the deposit deadline, which is typically one to three business days after mutual acceptance.
Offering more earnest money signals commitment and can strengthen a borderline offer. But only offer what you can actually access and transfer quickly. A bounced earnest money check is a serious problem that can void your accepted offer.
Earnest Money vs. Down Payment: They Are Not the Same Thing
This is the confusion that trips up most first-time buyers. The earnest money deposit and the down payment are two separate concepts, even though the money eventually ends up in the same place.
Your down payment is the portion of the purchase price you're paying out of pocket at closing. Your earnest money is a deposit paid shortly after your offer is accepted that gets credited toward that down payment at the closing table.
Think of it this way. If you're putting 5% down on a $500,000 home, your down payment is $25,000. If you paid $10,000 in earnest money, you bring the remaining $15,000 to closing, because the $10,000 is already being held in escrow and gets applied automatically.
You're not paying the earnest money on top of your down payment. You're paying it early.
When Earnest Money Is Refundable
This is the question buyers care about most, and the answer depends entirely on the contingencies written into your purchase agreement.
Contingencies are conditions that must be met for the sale to proceed. If a contingency isn't satisfied, the buyer typically has the right to cancel the contract and recover their earnest money. The most common contingencies in Washington State purchase agreements are inspection, financing, and appraisal.
Inspection contingency. If the home inspection reveals issues you're not willing to accept or negotiate around, an inspection contingency gives you the right to cancel and receive your earnest money back within the contingency period.
Financing contingency. If your loan falls through despite your good faith efforts to obtain financing, a financing contingency protects your deposit. This is why getting fully pre-approved before making an offer matters so much, it significantly reduces the risk of your financing contingency being triggered.
Appraisal contingency. If the home appraises below the purchase price and you're unwilling or unable to cover the gap, an appraisal contingency allows you to exit the contract with your deposit intact.
When Earnest Money Is Not Refundable
If you cancel the contract for a reason not covered by a contingency, or after all contingencies have been waived or expired, the seller typically has the right to claim your earnest money as liquidated damages. This is sometimes called forfeiting your deposit.
Common situations where buyers lose their earnest money include changing their mind after all contingencies have been removed, missing the deposit deadline and having the seller cancel the contract, or backing out without a contractual basis for doing so.
Waiving contingencies is a strategy some buyers use in competitive markets to make their offer more attractive. It works, but it transfers real financial risk to you. If you waive your appraisal contingency and the home appraises short, you either cover the gap or lose your deposit. If you waive your financing contingency and your loan falls apart, the same outcome applies.
Understand what you're giving up before you waive anything.
How and When to Submit Your Earnest Money
In Washington State, earnest money is typically due within one to three business days of mutual acceptance, which is the moment both buyer and seller have signed the purchase agreement. Your real estate agent will confirm the exact deadline specified in your contract.
The deposit is paid by personal check, cashier's check, or wire transfer to the title or escrow company named in the agreement. Do not make the check out to the seller directly. Earnest money should always go to a neutral third-party escrow holder, not to any individual party in the transaction.
Once the funds are in escrow, they stay there until closing, at which point they're credited toward your costs, or until the contract is cancelled, at which point the disposition of the funds is determined by the terms of the cancellation.
The Bottom Line on Earnest Money
Earnest money isn't a cost you lose. It's a deposit you make, held safely in escrow, credited at closing, and protected by contingencies as long as you use them correctly.
The buyers who get into trouble with earnest money are almost always the ones who didn't understand the contingency structure of their contract before they signed it. Read what you're agreeing to. Know your deadlines. And if you're considering waiving a contingency, understand exactly what financial exposure that creates before you do it.
Have questions about how much to offer or how to protect your deposit on your specific transaction? Schedule a free 15-minute call and we'll walk through it with you.