How much earnest money should you put down on a Kirkland home, and when could you actually lose it? If you are buying on the Eastside, you want to write a strong offer without putting too much at risk. This guide walks you through how earnest money works in Washington, what is typical in Kirkland, when deposits become non‑refundable, and smart strategies to protect your funds in a competitive market. Let’s dive in.
Earnest money basics in Washington
Earnest money is your good‑faith deposit that shows a seller you are serious. It is usually held by a neutral escrow or title company and goes toward your cash at closing if the sale completes. The amount, deadlines, and refund rules are set by the contract you sign, commonly the Washington REALTORS Residential Purchase and Sale Agreement and addenda.
Escrow follows the written instructions in your contract. Funds are only released by mutual written direction from both parties, by the contract’s stated remedies after default, or by a court order. There is no single statewide rule for deposit size. Local norms and your contract language control.
What is typical in Kirkland
Kirkland is a higher‑priced Eastside market, so deposit percentages translate to larger dollar amounts. In balanced conditions, buyers often offer about 1 percent, or sometimes a flat amount like 5,000 to 10,000 dollars for typical single‑family homes. In competitive situations, many buyers choose 2 to 5 percent or higher to stand out.
To visualize the range:
- On a 700,000 dollar home, 1 percent is 7,000 dollars, 2 percent is 14,000 dollars, and 5 percent is 35,000 dollars.
- On a 1,200,000 dollar home, 1 percent is 12,000 dollars, 2 percent is 24,000 dollars, and 5 percent is 60,000 dollars.
There is no single “right” number. You want a deposit that signals commitment while keeping your potential loss within a level you can accept if the contract later fails outside of protected contingencies.
When earnest money is refundable
Whether you get your deposit back depends on your contract and deadlines. Earnest money is typically refundable when you terminate under a valid contingency and follow the notice requirements in time. Common contingencies include inspection, financing, appraisal, title review, and sale of your current home.
Inspection periods are often about one to one and a half weeks. If you cancel within that window using the proper notice, your earnest money is generally returned. Financing and appraisal timelines are usually longer. If a lender denial or low appraisal allows you to cancel under the contract, your deposit is typically refunded as long as you deliver the required written notice on time.
When it can become non‑refundable
Your deposit becomes more exposed to loss when you remove contingencies or miss deadlines. If contingency timelines expire and you have waived protections in writing, backing out later can lead to forfeiture. Some offers include explicit non‑refundable language to appear stronger, which increases buyer risk.
If a buyer defaults without a contractual right to terminate, the seller may elect to keep the earnest money as liquidated damages or pursue other remedies. The exact outcome depends on the contract’s remedy language and the seller’s choice.
How escrow handles your deposit
Escrow and title companies act as neutral third parties. They hold your funds, issue a receipt, and release money only according to the contract and proper written instructions. Wires or cashier’s checks are common, since funds typically must clear quickly.
If a dispute arises, escrow will not choose a side. The parties often sign a mutual release directing where funds go. If they cannot agree, escrow may hold the money until a court decides or the parties resolve it.
Protect your deposit in Kirkland offers
You can compete without taking unnecessary risks by using simple, disciplined steps:
- Get full lender pre‑approval, not just pre‑qualification, and include proof with your offer.
- Choose a meaningful earnest amount you can stomach if things go sideways. In balanced markets, 1 to 2 percent is common. In competitive offers, 2 to 5 percent or more is typical.
- Deliver funds on time. If the contract says deposit within a set number of business days after mutual acceptance, calendar it and send the wire early.
- Preserve your contingency rights. Complete inspections within the inspection period, request repairs or terminate in writing, and keep lender communications documented.
- Shorten timelines instead of removing critical protections. Consider a shorter inspection window or order lender documents early, but leave yourself enough time to do real diligence.
- Consider a staged deposit. Some buyers use a smaller initial deposit, then add a larger amount after removing inspection. This can show commitment while limiting early exposure.
- Use escalation clauses and cash at closing carefully. Sellers value money already in escrow, but you do not want to overextend without protection.
- Seek legal review before agreeing to unusual non‑refundable terms, especially before major inspections or financing milestones.
Smart offer language examples
Here are plain‑language phrases you can tailor with your broker and lender:
- “Earnest money of [amount], to be deposited with [Escrow Company] within [number] business days of mutual acceptance.”
- “Buyer’s earnest money will be refunded if Buyer terminates under the inspection contingency by [date] or under the financing contingency by [date], as provided in the purchase agreement.”
- “Buyer will deliver an initial earnest deposit of [amount], with an additional [amount] due upon Buyer’s removal of the inspection contingency.”
Keep the phrasing consistent with the forms used in your transaction. Your broker and escrow officer can help ensure the wording matches the contract.
Common pitfalls to avoid
- Missing a termination deadline during the inspection period or failing to use the proper notice form in time.
- Assuming an “as‑is” offer still preserves all protections. You need to confirm what you have actually waived.
- Agreeing to non‑refundable language too early, before you have completed key diligence.
- Delivering the deposit late. A late deposit can create a technical default and weaken your position.
If the deal falls through
When a contract fails, the parties often sign a mutual release and instruct escrow where to send the funds. If they disagree, escrow may hold the money until there is an agreement or a court order. Sellers sometimes keep the earnest money as liquidated damages when buyers default, while buyers rely on written contingencies to recover deposits when they terminate properly.
Buying in Kirkland means balancing speed and caution. With the right strategy, you can write a compelling offer while guarding your deposit and your peace of mind. If you want a clear plan tailored to your price point and neighborhood, connect with Nick Loveless Real Estate for local guidance.
FAQs
How much earnest money should you offer on a Kirkland home?
- Many buyers use 1 to 3 percent in balanced markets and 2 to 5 percent or more in competitive offers, adjusted for price point and property demand.
When will you lose your earnest money in Washington contracts?
- You risk forfeiture if you default after removing protections or miss deadlines, and the seller elects remedies allowed by the contract.
What does a non‑refundable earnest deposit mean in Washington?
- It means the contract states the deposit, or a portion, will not be returned if you later back out, which increases buyer risk and should be negotiated carefully.
Who holds the earnest money in a typical Kirkland sale?
- A neutral escrow or title company usually holds it under the contract’s instructions, though a listing broker’s trust account may sometimes be named.
Can you get earnest money back if the appraisal comes in low?
- If your contract includes an appraisal or financing contingency, a low appraisal often allows termination and refund when you give written notice on time.
What documentation helps protect refund rights in Washington?
- Keep a written lender denial if financing fails, inspection reports and repair requests within the inspection window, timely termination notices, and proof of deposit delivery.