Earnest money is one of those real estate terms you hear early in the buying process, but many people don’t fully understand until they’re writing an offer. In Oregon, earnest money is a deposit that shows the seller you’re serious – and it can become a point of stress if a deal starts to wobble.
What Earnest Money Is (In Plain English)
Earnest money is a good-faith deposit you submit after your offer is accepted, and it’s typically held in a trust account until closing. It’s not an extra fee; it’s money that usually applies toward your purchase at the end of the transaction.
How Much Earnest Money Do Buyers Typically Put Down?
The amount can vary based on price point, competition, and what’s normal in the local market. In competitive situations, a stronger earnest money deposit can make your offer feel more serious, but it should always be an amount you’re comfortable tying up during escrow.
Where the Earnest Money Goes and Who Holds It
In most Oregon transactions, earnest money is held by the escrow company or another agreed-upon neutral party. The funds stay there until closing, unless the contract is terminated under terms that require the deposit to be returned or released.
When You Get Your Earnest Money Back
If you terminate the contract properly under your contingencies (like inspection, financing, or appraisal), you can often receive your earnest money back. The key is following the contract timelines and paperwork requirements, because missing a deadline can change your options.
When You Could Lose Your Earnest Money
Buyers are most at risk of losing earnest money when they walk away without a valid contractual reason or after contingency deadlines have passed. That’s why it’s so important to understand the contract terms and to communicate quickly if something changes during escrow.
How to Protect Yourself as a Buyer
The best protection is a well-written offer with clear contingencies and realistic timelines. Working with an experienced agent helps you understand what youre agreeing to, track deadlines, and avoid accidental mistakes that can put your deposit at risk.
Conclusion
Earnest money doesn’t have to be scary – it just needs to be handled thoughtfully. As your REALTOR, I’m happy to walk you through the numbers, timelines, and strategies so you feel confident before you sign anything.
—Robyn Schamberger, Real Estate Broker
