Buying a home in Spokane Valley comes with a lot of moving parts. One of the first you’ll hear about is earnest money, the deposit that shows a seller you’re serious. It affects your offer strength, your budget, and your risk if plans change. In this guide, you’ll learn what earnest money is, how it works in Washington contracts, typical amounts in Spokane Valley, when it is refundable, and how to use it strategically. Let’s dive in.
What earnest money is in Washington
Earnest money is your good‑faith deposit. It tells the seller you intend to buy and gives them limited protection if you walk away without a contract‑approved reason. If you close, the deposit is credited toward your down payment and closing costs.
In Washington, your deposit typically goes to a neutral escrow or title company and is held in a trust account until closing or cancellation. You should receive a written receipt from the escrow or title company. Real estate licensees and escrow companies must follow state rules for handling client funds.
Most Spokane County purchases use standardized forms from Washington REALTORS or NWMLS. These forms set the deposit amount, where it is held, when it is due, and which contingencies protect you. They also explain what happens if a buyer defaults, including whether the seller may keep the deposit as liquidated damages or pursue other remedies.
If there is a disagreement over who gets the deposit, the escrow holder keeps the funds until the parties agree, a mediator or arbitrator decides per the contract, or a court orders distribution.
Typical amounts in Spokane Valley
What most buyers offer
Local practice varies by price point and competition. For entry‑level homes, many offers use flat amounts, often in the range of 2,500 to 10,000 dollars. For mid‑market homes, 5,000 to 15,000 dollars or about 1 percent of the price is a common reference point. In multiple‑offer situations, deposits can be higher to signal commitment.
These are starting points, not rules. The right number depends on the list price, how competitive the home is, and your comfort with risk.
Factors that shape your amount
- Purchase price and affordability. Keep the deposit meaningful but not so large that it strains your cash needs.
- Market competitiveness. Hot listings or multiple offers can push amounts higher.
- Property type and seller expectations. New construction or investor‑targeted properties may call for stronger deposits.
- Your contingencies. If you keep inspection and financing protections, a moderate deposit often makes sense.
- Local custom. Recent accepted offers in Spokane Valley provide the best benchmark.
Quick examples
- Lower‑priced home with mild competition: 2,500 to 5,000 dollars.
- Mid‑market home in steady demand: 5,000 to 15,000 dollars or around 1 percent.
- Multiple offers or a standout listing: consider higher deposits paired with strong terms.
When you can get it back
Common contingencies
Several standard contingencies preserve your right to a refund if you cancel within deadlines and give proper notice:
- Inspection: you can cancel within the inspection period if the results are unacceptable.
- Financing: if your loan is denied despite good‑faith efforts by the financing deadline, you can terminate with documentation.
- Appraisal: if value comes in low and no agreement is reached, you may cancel based on the contract terms.
- Title: unresolved, material title issues can allow cancellation and a refund.
- Sale of buyer’s home: if your current home does not sell within the agreed time, you may cancel.
Preserve your refund rights
- Track all deadlines precisely, including deposit delivery, inspection removal, financing and appraisal dates.
- Use the exact written notices and delivery methods the contract requires.
- If financing fails, be ready to provide lender documentation.
- If a dispute surfaces, loop in your agent quickly and follow the contract’s dispute steps.
When it is at risk
After removing contingencies
If you waive or remove contingencies and then fail to close without a contract‑approved reason, the seller is typically entitled to the deposit under the remedy language in the agreement.
Missing deadlines or agreeing to non‑refundable terms
Late delivery of funds or failure to meet a key deadline can trigger seller remedies. Some offers include non‑refundable deposits to look stronger. That adds risk for buyers and should only be used when you fully understand the consequences.
Smart offer strategies in Spokane Valley
Align your deposit with protections
Match your deposit size to the protections you keep. If you plan to use full inspection and financing contingencies, a modest but meaningful deposit often works well. In a competitive setting, consider a larger deposit paired with shorter timelines or stronger proof of financing to balance strength and safety.
Compete without extra risk
If you want to stand out without tying up too much cash, consider:
- A strong preapproval letter and clear proof of funds for your down payment.
- Shorter inspection periods, if you can schedule inspections quickly.
- An escalation clause, flexible closing dates, or a rent‑back option if it fits your needs.
Avoid all‑or‑nothing non‑refundable deposits unless you are fully prepared to lose the funds if something changes after you waive protections.
Budgeting and lender documentation
Treat earnest money as part of your total cash to close since it is usually credited at closing. Keep the funds liquid so you can also pay for inspections and other up‑front costs without strain. Talk to your lender about documentation. You will need to show the source of funds, such as bank statements or gift letters. Avoid large, last‑minute transfers that are hard to source.
Wiring your deposit safely
Wire fraud is a real risk in real estate. Protect yourself with a few simple habits:
- Verify wiring instructions directly with the escrow or title company by calling a known, published phone number.
- Never rely only on email wiring instructions.
- Get a written receipt for your deposit and keep bank records that show the date and amount.
- Do not send funds before a fully executed contract unless the contract clearly requires it and you understand why.
Quick notes for sellers
Earnest money shows the buyer’s commitment and gives you a clear remedy if the buyer defaults under the contract. Confirm that the deposit is delivered on time and held by the named escrow holder. If a buyer defaults, follow the contract’s remedy options, which may include keeping the deposit as liquidated damages or pursuing other remedies. Consult your agent and, if needed, legal counsel before taking action.
If you want help sizing the right deposit for your situation, weighing risk, or shaping a competitive offer in Spokane Valley, reach out to a local guide who knows both the contracts and the homes. Tap into construction‑savvy, neighborhood‑level advice and a clear plan from Kristin Vanos.
FAQs
What is earnest money versus a down payment?
- Earnest money is a good‑faith deposit held by escrow and usually credited to you at closing, while the down payment is the larger amount you bring to fund your purchase.
How much earnest money is typical in Spokane Valley?
- Many buyers offer several thousand dollars, often 2,500 to 10,000 dollars for entry‑level homes or about 1 percent for mid‑market homes, with higher amounts in competitive cases.
Who holds the deposit in Washington?
- A neutral escrow or title company usually holds the funds in a trust account and should provide you with a written receipt.
When is earnest money refundable in Spokane County contracts?
- It is typically refundable if you cancel within the contract’s timelines under contingencies like inspection, financing, appraisal, title, or sale of your current home.
How can I make my offer stronger without risking my deposit?
- Pair a meaningful deposit with shorter inspection timelines, strong preapproval, or flexible terms like closing date or rent‑back instead of waiving protections.
What happens if the buyer and seller disagree about the deposit?
- The escrow holder keeps the funds until both sides agree, the parties follow the contract’s dispute process, or a court orders distribution.