Ever wondered why buyers in Bothell are asked to put money down right after an offer is accepted? That upfront deposit is called earnest money, and it plays a key role in how Washington home sales move forward. If you are buying, it shows you are serious. If you are selling, it helps protect you if a buyer walks away without a valid reason. By the end of this guide, you will understand how earnest money works in Washington, what is common in Bothell and King County, and how to protect your interests. Let’s dive in.
Earnest money basics in Washington
What it is and why it matters
Earnest money is a deposit you make with your offer to buy a home. It signals good faith and helps bind the agreement. If the sale closes, the deposit is usually credited toward your down payment and closing costs.
For sellers, it provides immediate assurance and a potential remedy if a buyer breaches the contract. For buyers, it strengthens your offer, especially in competitive situations.
How it moves through a sale
Your purchase agreement sets the earnest money amount, who holds it, and when you must deposit it. In Washington, the funds are held in a trust or escrow account, most often by a title or escrow company. If the transaction closes, the money applies to your buyer funds due at closing.
If you end the deal under a valid contingency in the contract, your deposit is typically returned. If you breach the agreement, the seller may seek to keep the deposit if the contract allows.
Bothell and King County norms
Typical amounts buyers offer
There is no fixed percentage required by law. Amounts are market-driven. Nationally, many buyers offer around 1 to 3 percent of the price. In high-demand parts of King County, including areas of Bothell, buyers sometimes offer higher deposits to stand out.
How much you offer depends on price point, your financing strength, and the competitiveness of the property. Your agent can help you right-size the deposit for current Bothell conditions.
Market conditions that influence deposits
In multiple-offer situations, buyers may increase the deposit, shorten contingency timelines, or even waive certain protections to look stronger. These choices raise risk for the buyer. In a slower market, smaller deposits and longer contingency periods may be acceptable.
Who holds your deposit
Title and escrow in practice
In King County, deposits are commonly held by a reputable title or escrow company. The contract should name the escrow holder and include instructions for handling the funds. Some transactions may use a brokerage trust account where permitted, but best practice is an independent escrow or title company. Always obtain and keep a receipt for your deposit.
Refunds, forfeiture, and disputes
When buyers get money back
If you terminate within the timelines and procedures of a valid contingency, the earnest money is usually returned to you according to the contract. Common contingencies include inspection, financing, appraisal, and sale of your current home.
Follow the contract exactly. Notices must be delivered on time and in the manner the agreement requires.
When sellers may keep it
If a buyer breaches the contract and there is a liquidated damages clause or a legal basis to retain the deposit, the seller may seek to keep the funds. Whether a seller can keep the earnest money depends on the specific contract language and the facts of the situation.
How disputes are handled
Escrow will not release disputed funds without a written agreement from both parties or an order from a court or other adjudicator. Many Washington purchase agreements include a dispute resolution clause that outlines mediation, arbitration, or court options. Escrow holders may also use an interpleader process if they receive competing claims.
Contingencies that protect you
- Inspection contingency allows you to negotiate repairs or terminate within a stated period.
- Financing contingency protects you if your lender denies the loan as described in the contract.
- Appraisal contingency can help if the home appraises below the purchase price.
- Sale-of-home contingency ties your purchase to selling your current property by a deadline.
Each contingency has steps and timelines. Miss a deadline and you may lose the related protection.
Buyer checklist to protect your deposit
- Confirm who holds the funds and how to pay before sending money.
- Use a cashier’s check or wire transfer to the named escrow or title company, as instructed.
- Get a written receipt from escrow and save it.
- Track every deadline in your purchase agreement, especially for inspections and financing.
- Send required notices in writing and on time, as the contract specifies.
- Keep all communications documented. Do not rely on verbal changes.
- Verify any wire instructions by calling the escrow or title company at a known phone number.
Seller tips to evaluate deposits
- Review the deposit amount in context with price, buyer strength, and market competition.
- Confirm the escrow holder is a recognized title or escrow company.
- Understand the contingency timelines and how they affect refundability.
- Ask your agent how dispute resolution works in the contract before accepting an offer.
Earnest money and wire safety
Wire fraud is a real risk in real estate. Treat any email with new or changed wiring instructions as suspicious. Always confirm instructions by calling the escrow or title company using a trusted phone number, not a number from a new email. Send funds only after you verify the account details.
Timing, notices, and receipts
Your purchase agreement sets the deposit deadline, sometimes stated as within a certain number of days after mutual acceptance. Read that section carefully and plan your payment method in advance. If you are mailing a check or arranging a wire, build in time for delivery and clearance.
For any termination or contingency-related step, use the exact forms and delivery methods required by the contract. Keep proof of delivery, such as email confirmations or escrow acknowledgments. If a conflict arises, talk with your agent and consider consulting an attorney licensed in Washington.
Bottom line for Bothell buyers and sellers
Earnest money is a simple idea with big implications. In Bothell and greater King County, the amount you offer, the holder you choose, and how you manage deadlines can shape your leverage and your risk. When your purchase agreement is clear and you follow each step on time, you protect your deposit and keep your move on track.
If you want straight answers tailored to your situation, reach out to Kelli Leese. Whether you are buying or selling, you will get calm, step-by-step guidance and local insight. Get your free home valuation and start planning with confidence.
FAQs
What is earnest money in a Washington home purchase?
- Earnest money is a good-faith deposit held in escrow that applies to your closing funds and helps secure the purchase agreement.
How much earnest money is typical in Bothell, King County?
- There is no set percentage; many buyers offer around 1 to 3 percent, with higher amounts common in competitive situations.
Who usually holds earnest money in King County?
- A title or escrow company typically holds the funds in a trust account named in the purchase agreement.
Can a seller keep a buyer’s earnest money in Washington?
- Possibly, if the buyer breaches and the contract allows it; escrow generally needs written agreement or a court order to release funds.
When does a buyer get earnest money back in Washington?
- If the buyer terminates under a valid contingency and follows the contract’s timelines and notice rules, the deposit is typically refunded.
What payment methods are used for earnest money in Washington?
- Cashier’s checks and wire transfers are common, though you should confirm accepted methods with the named escrow or title company.
How do I avoid wire fraud when sending earnest money?
- Verify wiring instructions by calling the escrow or title company at a known phone number and be suspicious of last-minute changes sent by email.
Are earnest money deadlines the same in every contract?
- No, your purchase agreement controls the deadlines for deposit and notices, so read it closely and follow it exactly.
