Buying Process4 min read
How Earnest Money Works in Washington State
Earnest money is one of the most misunderstood parts of buying a home. Here's what it is, how much you need, and when you can lose it.
What earnest money is
Earnest money is a deposit you make when your offer is accepted. It shows the seller you're serious. In Washington, it's typically 1-3% of the purchase price — so $5K–$15K on a $500K home. The money goes into an escrow account managed by the title/escrow company, not directly to the seller.
When you get it back
If you back out during a contingency period (inspection, financing, appraisal), you get your earnest money back. If you back out after contingencies are removed without a valid reason, the seller can keep it. This is why understanding your contingency timelines is critical.
- Inspection contingency: typically 10 days
- Financing contingency: typically 21-30 days
- Appraisal: usually tied to financing contingency
- Title review: typically 5 days
How much is enough?
In competitive markets like Seattle, 2-3% is standard. In less competitive markets (Spokane, parts of Portland), 1-2% is common. Going higher signals stronger intent and can make your offer stand out — but only risk what you're comfortable potentially losing.
At closing
Your earnest money is applied to your down payment and closing costs. It's not an additional cost — it's an advance on what you already owe. The closing cost calculator can help you see the full picture of what you'll need at the table.
Related reading
What Earnest Money Actually Means in Washington State
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