Have you heard you need “earnest money” to buy a home in Everett and wondered what that really means? You are not alone. This small but important deposit can shape how strong your offer looks and how protected you are if plans change. In this guide, you will learn what earnest money is, how it works in Snohomish County, typical amounts, timelines, and smart ways to keep your funds safe. Let’s dive in.
Earnest money basics
Earnest money is a good faith deposit you include with a purchase offer to show a seller you are serious. If the sale closes, the deposit is credited to your down payment or closing costs. If the contract ends under a valid contingency, you typically get it back.
The deposit helps hold the deal in place while you complete inspections, appraisal, financing, and title review. If a buyer breaches without contract protection, the seller may be able to keep the deposit under a liquidated damages clause, subject to the contract and applicable law.
How it works in Washington
In Western Washington, including Everett, buyers and sellers commonly use NWMLS purchase and sale forms. These forms spell out your deposit amount, where it is held, and when it is due. The forms also outline contingency timelines and what happens if a party defaults.
After mutual acceptance, you deliver the deposit to the escrow or title company named in the contract or to a brokerage trust account. Funds are held in a trust or escrow account until closing or until both parties give instructions to release them under the contract.
Typical amounts in Everett
There is no single rule for deposit size, but local offers often fall into these ranges:
- About 1 to 3 percent of the purchase price
- Flat amounts like 2,500 to 10,000 dollars on moderately priced single-family homes
- Larger sums on higher-end properties or in very competitive multiple-offer situations
Your agent will tailor strategy to the price point, property type, and level of competition. The goal is a deposit that shows commitment without stretching your cash beyond what is comfortable and wise.
Timelines and delivery
Your purchase contract sets the deadline to deliver earnest money, often within a few business days after mutual acceptance. Missed deadlines can weaken your position, so plan ahead.
Common steps to deliver funds:
- Confirm the escrow or title company named in the contract.
- Decide on the method, usually a verified wire or cashier’s check.
- Follow the escrow holder’s instructions and delivery window exactly.
- Get written confirmation or a receipt when your funds are deposited.
Keep records of all notices and receipts. Clear documentation helps avoid confusion later.
Contingencies that protect you
Contingencies give you time to verify the home and your financing. If you end the contract within a valid contingency period and follow notice rules, you typically receive your deposit back.
Common contingencies include:
- Inspection: Time to inspect and request repairs or cancel.
- Financing: Time to secure final loan approval.
- Appraisal: Ensures the lender’s appraisal supports the price.
- Title review: Time to review the preliminary title commitment.
- Sale of buyer’s home: If you need to sell your current home first.
Always note the exact deadlines in your contract. If a contingency expires or is waived, your deposit is more at risk if you later try to cancel.
When you could lose it
You could forfeit your deposit if you default without contractual protection. Examples include walking away after contingencies are removed or missing critical deadlines that the contract does not excuse.
Most contracts include a liquidated damages option that allows the seller to keep the earnest money as agreed damages, but the specifics depend on the form and what both parties elected. Escrow companies generally will not release funds until they receive mutual written instructions or a lawful order that tells them how to disburse.
Keep your wire safe
Wire fraud targeting earnest money and closing funds is a real risk. Protect yourself with these steps:
- Verify wiring instructions by calling the escrow or title company at a phone number you independently confirm. Do not call a number from an email link.
- Never send a wire based solely on emailed instructions or a PDF attachment.
- Confirm the account name and number with the escrow officer before sending.
- If you receive new or changed wiring instructions, treat it as a red flag and re-verify by phone.
- Consider a cashier’s check when acceptable and practical.
If something looks off, pause and call your escrow officer or your agent right away.
Make your offer stronger
A larger earnest money deposit can help your offer stand out, especially when multiple offers are in play. That said, deposit size is just one piece.
Other terms that matter to sellers:
- Solid lender preapproval and clear financial documentation
- Realistic timelines that match the seller’s move-out needs
- Reasonable inspection timelines and clear communication
- A reputable escrow or title company named in the offer
Focus on overall certainty of closing. Sellers value a clean, well-prepared offer.
Tips for Everett sellers
If you are selling, earnest money helps screen for serious buyers and manage risk. Consider these guidelines:
- Require a meaningful deposit that matches your price point and market conditions.
- Use clear contingency timelines so everyone understands the schedule.
- Discuss the liquidated damages option with your broker so you understand how it works in your contract forms.
- Name a specific escrow or title company in your agreement and confirm how they handle disputes and disbursements.
Clear expectations up front help avoid confusion later.
Buyer checklist before you send funds
Use this quick checklist before you deliver earnest money in Everett:
- Confirm the amount and strategy with your agent based on price and competition.
- Verify that the named escrow or title company is licensed and reputable.
- Write down key deadlines: deposit due date, inspection period, financing and appraisal milestones.
- Know exactly when the deposit is refundable under your contingencies.
- Plan a secure payment method: cashier’s check or verified wire with phone confirmation.
- Get written confirmation from escrow that your deposit has been received.
- Keep copies of all notices and communications about contingencies.
Work with a local guide
Earnest money is a small piece of your purchase that carries big consequences. With the right plan, you can present a strong offer and still protect your funds. If you are buying in Everett or anywhere in Snohomish County, you deserve a team that explains every step and keeps timelines on track.
Have questions about deposit size, contingency timing, or offer strategy for your price point? Connect with the local team at Pilchard Properties. We will walk you through your options, coordinate with escrow, and help you submit a confident, secure offer.
FAQs
How much earnest money should Everett buyers expect?
- Many local offers use a few thousand dollars or about 1 to 3 percent of the price, with larger deposits for higher-end homes or competitive situations.
When is earnest money due on a Washington offer?
- Your contract sets the deadline, often within a few business days after mutual acceptance, so plan funds and delivery method before you write the offer.
Where is earnest money held in Snohomish County?
- Funds are typically held in an escrow or title company trust account, or in a brokerage trust account if the contract allows it.
Can a buyer lose earnest money in Everett?
- Yes, a buyer can forfeit the deposit if they default without contingency protection or miss deadlines that the contract does not excuse.
What contingencies protect my deposit?
- Inspection, financing, appraisal, title review, and sometimes the sale of your current home can provide protections if exercised within the contract timelines.
Does my deposit apply to closing costs?
- If the sale closes, your earnest money is credited to your down payment or closing costs as outlined in your settlement statement.
How do I avoid wire fraud when sending funds?
- Always verify wiring instructions by calling the escrow or title company at a known number and never rely solely on email instructions.
What happens if buyer and seller disagree about the deposit?
- Escrow usually holds the funds until there are mutual written instructions or a lawful order, and parties may negotiate, mediate, or seek legal remedies.
Is earnest money taxable on its own?
- Not separately; it becomes part of the purchase price if the sale closes, and if a seller keeps it as damages the tax treatment can vary, so consult a CPA.
