Buying in Bellingham and wondering how much earnest money to plan for? You are not alone. This small but important deposit signals that you are serious and helps secure your place in the contract while you work through inspections, financing, and other steps. In this guide, you will learn what earnest money is, how much is typical in Whatcom County, when it is due, and how to protect it. Let’s dive in.
What earnest money does in Washington
Earnest money is a good‑faith deposit you put down when your offer is accepted. It shows commitment and gives the seller confidence while both sides complete contingencies like inspection, financing, appraisal, and title review.
In Washington, standard purchase and sale forms allow you to set the amount, the due date, who holds the funds, and how they are disbursed. The deposit is usually credited to you at closing, either toward your down payment or closing costs, unless the contract spells out a different outcome.
Most deposits are held in a trust account by a neutral third party, often a title or escrow company. These accounts follow state rules, and the funds are not released unless the contract terms or written instructions allow it.
How much to expect in Bellingham
Customs vary with the market. A common starting point is 1% to 3% of the purchase price. In more competitive situations, some buyers choose 3% to 5% or more to strengthen their offer. Your strategy should match your comfort level and the property’s demand.
Here are simple examples to help you budget:
- $400,000 purchase price: 1% = $4,000, 2% = $8,000, 3% = $12,000
- $600,000 purchase price: 1% = $6,000, 2% = $12,000, 3% = $18,000
What is typical in Bellingham depends on property type, price tier, and current competition. In a calmer market, some sellers accept a 1% deposit or a flat amount like $2,500 to $5,000. In a tight market, higher deposits and faster timelines often stand out. Balance strength with the protections you need.
When a smaller deposit can work
A lower or symbolic deposit can make sense if you have strong contingencies and want to limit cash tied up during the process. Keep in mind, a very small deposit can signal lower commitment, which may weaken your offer when there are multiple bids.
When a larger deposit helps your offer
If a property is receiving a lot of attention, a larger deposit and a prompt delivery timeline can assure the seller that you are committed. Some buyers pair a larger deposit with strong terms, or even waived contingencies, but that raises risk. Be sure you understand what you are giving up before you offer more.
When earnest money is due
Your purchase contract sets the due date. In many Bellingham offers, buyers deliver funds within 1 to 3 business days after mutual acceptance. The exact timeline is negotiable, and sellers often prefer a faster deposit. Missing the deadline can weaken your offer or allow the seller to consider other options, so set a timeline you can meet and fund it on time.
Who holds your deposit
Most deposits are placed with a title or escrow company that will also handle your closing. Some deals use a licensed escrow agent or, less commonly, a broker trust account. Your contract should clearly name the holder so you know where the funds will go.
How to deliver it safely
Accepted methods often include wire transfer, cashier’s check, certified check, or a verified electronic deposit. Use these safety steps to avoid fraud:
- Confirm wiring instructions by phone using a known, trusted phone number for the escrow or title company.
- Do not rely on links or numbers in unexpected emails.
- Double‑check the account name and number before sending.
- Ask for a written receipt from escrow as soon as the deposit arrives.
What protects your earnest money
Contingencies in your contract protect your deposit and give you a path to cancel if needed. Common protections include:
- Inspection or feasibility: You can inspect, request repairs, or cancel within the stated window.
- Financing: If you cannot obtain loan approval within the time allowed, you may cancel for a refund, depending on the terms.
- Appraisal: If the appraisal comes in low, you can negotiate, bring cash to close, or cancel as the contract allows.
- Title: If there are title issues that are not cured, you may have the right to terminate.
These protections work only if they are written into your offer and you follow the deadlines and notice rules. Read your purchase and sale agreement closely and talk with your agent about each timeline.
When a seller may keep the deposit
If you default after removing protections, or if you simply walk away outside any valid contingency, the seller may be entitled to keep the earnest money as liquidated damages, depending on the contract. Some contracts give the seller other remedies as well. Outcomes always follow the language in your agreement and the facts of the situation.
If there is a disagreement, escrow usually holds the funds until both parties sign a release or a court or dispute process directs disbursement. Many title companies offer dispute procedures, and parties can also use mediation or the court system if needed.
Simple steps to get prepared
Use this checklist to stay organized and confident:
- Budget for 1% to 3% of your target price, with flexibility if competition is strong.
- Confirm who will hold your deposit and how they accept funds before you write the offer.
- Set a deposit deadline you can meet, often within 1 to 3 business days of mutual acceptance.
- Make sure inspection, financing, appraisal, and title timelines are clear in the offer.
- Use secure methods to transfer funds and get a written receipt from escrow.
If you are selling, decide what you want from the earnest money clause. Consider the amount, the deposit deadline, and whether the deposit will serve as liquidated damages if the buyer defaults. Ask your agent how recent offers in your segment of the Bellingham market are handling these terms.
Work with a local guide
The right earnest money strategy depends on the property, the market, and your comfort with risk. A local advisor can help you balance a strong offer with smart protections, and keep you on schedule so your deposit is safe. If a situation is unusual or a dispute arises, consider consulting a real estate attorney for clarity on your options.
Ready to plan your Bellingham offer and set the right earnest money strategy for your goals? Reach out to Kate Fadden. Let’s talk about your next move.
FAQs
How much earnest money is typical in Bellingham?
- Many offers use 1% to 3% of the purchase price, while competitive situations can push some buyers to 3% to 5% or more depending on terms and comfort with risk.
When is earnest money due after mutual acceptance?
- The contract sets the deadline, and a common local timeline is 1 to 3 business days after mutual acceptance, subject to negotiation.
Who usually holds earnest money in Whatcom County?
- A neutral title or escrow company typically holds the funds in a trust account until closing or until both parties direct disbursement under the contract.
What contingencies protect my deposit as a buyer?
- Inspection, financing, appraisal, and title contingencies can allow you to cancel within stated timelines and recover your deposit, if the contract includes them and you follow the procedures.
Can a seller keep my earnest money if I back out?
- If you default outside valid contingencies or after removing them, the seller may keep the deposit as liquidated damages, depending on the contract language.
How do I avoid wire fraud when sending earnest money?
- Call the escrow or title company using a trusted phone number to verify wiring instructions, avoid links in emails, confirm the account details, and request a receipt once funds arrive.
What proof will I get after I deposit earnest money?
- Ask escrow for written confirmation or a receipt that shows the amount, the date received, and the account holder so you can verify the deposit is in place.
