Thinking about making an offer on a home in Kirkland and wondering how earnest money works in Washington? You are not alone. This deposit can strengthen your offer and protect you, but only if you understand the timing, contingencies, and risks. In this guide, you will learn exactly what earnest money is, how it is handled in King County, and the practical steps to keep your deposit safe. Let’s dive in.
What earnest money is in Washington
Earnest money is a good‑faith deposit you include with an offer to show the seller you are serious. If the sale closes, it is credited toward your down payment and closing costs. If the sale does not close, the purchase and sale agreement determines who gets the funds.
In King County, the deposit is typically held by a neutral third party, such as a title or escrow company, in a trust account. The handling of earnest money follows the written purchase and sale agreement and standard procedures used by local escrow/title companies in Washington.
Typical amounts in Kirkland
In Kirkland and nearby Eastside markets, buyers often offer about 1% to 3% of the purchase price as earnest money. On higher‑priced homes, you may also see flat‑dollar deposits, often in the range of $5,000 to $20,000. What you choose should align with your budget and risk tolerance.
Amounts vary with market conditions. In a hot seller’s market, larger deposits and fewer protections are more common. In a slower market, smaller deposits and stronger contingencies are typical. Ask your agent for current Eastside norms before you write an offer.
How and when you deposit
Your purchase and sale agreement will specify the amount, who holds it, and when it is due. A common timeline in King County is to deliver your deposit within 1 to 3 business days after mutual acceptance. Always obtain a written receipt from the escrow or title company that shows the deposit amount and the property it relates to.
At closing, your earnest money is credited toward your total cash to close. If the transaction does not close, the contract and any contingencies you included determine whether the deposit is returned or forfeited.
Contingencies that protect your deposit
Contingencies are your safety valves. If you follow the contract terms and timelines, these can allow you to terminate and recover your earnest money.
Inspection contingency
You can cancel within the inspection period if your agreement includes an inspection contingency and you act by the deadline. If you miss the deadline, you may lose this protection.
Financing contingency
If your loan is denied and you have a financing contingency, you can typically terminate and recover your deposit as long as you met your application obligations and notified the seller on time.
Appraisal contingency
If the home appraises below the purchase price and your contract includes an appraisal contingency, you may negotiate, bring additional funds, or cancel by the deadline. Your deposit is usually protected if termination follows the contingency terms.
Title and other contingencies
Contracts often include title review and other provisions. Follow the notice and timing requirements precisely to preserve your rights.
When a seller may keep your deposit
A seller may have the right to keep your earnest money as liquidated damages if you breach the contract after contingency periods expire or after you waive protections. The contract language controls, including any clause that lets the seller elect to keep the deposit without proving additional damages.
Missing a deadline can be costly. If there is a dispute about who is entitled to the funds, escrow will usually hold the money until both sides sign a release or a dispute‑resolution process decides the outcome.
Escrow and dispute handling in Washington
Here is the typical flow:
- Offer is accepted and the contract names the escrow or title company that will hold your deposit.
- You deposit the earnest money by the deadline and receive a receipt.
- Escrow follows the written instructions in the contract to credit the funds at closing or release them if both parties agree in writing.
If there is a disagreement, escrow generally will not decide who is right. The funds stay put until the buyer and seller provide joint instructions or a resolution process, such as mediation, arbitration, or a court order, determines who is entitled to the money.
Real‑world scenarios for Kirkland buyers
Low appraisal on an Eastside home
If an appraisal comes in low and the seller will not adjust the price, you can bring additional cash, renegotiate, or terminate if your appraisal contingency allows. Timely notice is essential to protect your deposit.
Loan denial after mutual acceptance
With a financing contingency, a lender denial can allow you to cancel and recover your deposit if you acted in good faith and met contract deadlines. If you did not, you may lose protection.
Seller breach before closing
If a seller fails to perform, such as not delivering clear title, you may be entitled to a return of your deposit under the contract and could pursue other remedies.
Waiving protections to compete
Some buyers offer non‑refundable deposits or waive contingencies to strengthen an offer. This is risky. If you cannot close for reasons not covered by the contract, your deposit could be forfeited.
Missing a key deadline
Most deadlines are strictly enforced. If you miss your inspection, financing, or appraisal window, you may lose the right to a deposit refund tied to that contingency.
Practical checklist for Kirkland buyers
Use this quick reference as you plan your offer:
Before you offer
- Ask your agent about current earnest‑money norms and how competitive your target neighborhood is.
- Choose a deposit amount that fits your budget and risk tolerance.
- Decide which contingencies you need to protect your position.
When you submit
- Specify the deposit amount, the escrow or title holder, and the delivery deadline in the offer.
- Plan to wire or deliver funds within 1 to 3 business days after mutual acceptance, as your contract specifies.
After deposit
- Obtain a written receipt from escrow or title confirming funds are in a trust account.
- Calendar every contingency deadline and set reminders.
- Keep documentation, such as inspection reports or lender communications, in case you need to exercise a contingency.
If problems arise
- Give written notice through your agent as required by the contract and before the deadline.
- If the seller disputes a refund, expect escrow to hold funds until there is a mutual release or formal resolution.
Smart strategies in a competitive Eastside market
- Size your deposit to match the market. A stronger deposit can improve your position without giving up important protections.
- Use contingencies thoughtfully. Keep inspection, financing, and appraisal protections unless you are fully comfortable with the risk.
- Avoid “non‑refundable” language unless you fully understand the implications. Seek guidance before making that decision.
- Watch the clock. Deadlines control your rights.
Work with a calm, detail‑driven team
Earnest money should give you leverage, not stress. With steady guidance, you can write a compelling offer and protect your deposit through closing. If you are planning to buy in Kirkland or the Eastside, Hawkins & O’Bryant can help you size your deposit, structure the right contingencies, and keep every deadline on track.
Ready to move forward with confidence? Connect with Hawkins & O’Bryant for clear, local guidance tailored to your goals.
FAQs
How much earnest money is typical in Kirkland?
- Many buyers offer about 1% to 3% of the purchase price, or a flat amount such as $5,000 to $20,000 on higher‑priced homes, depending on market conditions.
Who holds earnest money in Washington real estate deals?
- A neutral title or escrow company typically holds the funds in a trust account, following the instructions in the purchase and sale agreement.
Can I get my earnest money back after a home inspection in Kirkland?
- If your contract includes an inspection contingency and you terminate within the inspection period, you are typically entitled to a refund.
What happens to earnest money if the appraisal is low?
- If you have an appraisal contingency and act by the deadline, you can renegotiate or cancel and usually recover your deposit under the contract terms.
How long do I have to deposit earnest money after acceptance?
- Many contracts require delivery within 1 to 3 business days after mutual acceptance, but your specific purchase and sale agreement controls the timeline.
