Ever wonder how much earnest money you actually need to put down in Murrieta? When you are excited about a home, this deposit can feel like a big commitment. You want to protect your money while still writing a strong offer that gets noticed. In this guide, you will learn what earnest money is, how it works in Murrieta and Riverside County, what is typical for our market, and how to keep your deposit safe. Let’s dive in.
Earnest money basics
Earnest money is your good‑faith deposit that accompanies a signed purchase agreement. It shows the seller you are serious. If the sale closes, the deposit is credited toward your down payment or closing costs.
This deposit also gives the seller short‑term protection if a buyer backs out without a contractual reason. The money sits in an escrow or trust account until closing or until both sides agree on what to do with it.
Who holds your deposit
In most Murrieta transactions, a title company that provides escrow services holds the earnest money. An escrow officer opens a file, receives the funds, and issues a receipt.
In some cases, a licensed real estate broker can hold funds in a client trust account if everyone agrees. California requires strict handling of trust funds, and deposits must never go to a personal account.
How much to deposit in Murrieta
There is no single number that fits every offer. In the Inland Empire, you often see:
- About 1% to 3% of the purchase price, depending on price point and competition.
- Flat amounts such as $5,000 to $10,000 for modest competition or lower‑priced homes.
- Larger deposits in highly competitive situations or on higher‑priced homes.
Local norms can shift quickly. A Murrieta neighborhood with multiple offers may reward a higher deposit, while a slower segment might accept less. Ask your agent for current examples and strategy by price range.
Timing and delivery
Your purchase contract sets the deadline for depositing funds, commonly within 24 to 72 hours of offer acceptance. The escrow officer will provide instructions and acceptable forms of payment.
Common methods include personal check, cashier’s check, wire transfer, or approved electronic transfer. Always confirm the method and any clearing times with escrow so you do not miss your deadline.
Where it shows up in paperwork
The earnest money amount and due date are written in the purchase agreement. Escrow instructions will mirror those terms, and escrow will issue a receipt when the deposit arrives.
At closing, you will see the deposit credited on your settlement statement. It reduces the total cash you need to bring in.
Wire safety steps
Wire fraud is a real risk in real estate closings. Protect your funds with these steps:
- Verify wiring instructions by calling your escrow officer using a phone number you know is correct.
- Do not rely on links or phone numbers in a new email. Confirm using prior communications or the company’s official website.
- If anything looks off, call before you send money. Consider a cashier’s check if escrow allows and timing works.
Contingencies and refunds
Contingencies protect you and can make your deposit refundable if you cancel properly within the allowed time. Common protections include:
- Inspection contingency to evaluate the property and request repairs or cancel.
- Loan or financing contingency if you cannot obtain financing.
- Appraisal contingency if the appraised value comes in low.
- Title or sale‑of‑property contingencies if included.
If you cancel within the contingency period and follow the notice steps in the contract, your earnest money is generally refundable.
When a seller may keep it
If a buyer backs out after removing contingencies or misses required steps, the seller may seek the deposit. Many contracts include a liquidated damages clause that allows the seller to keep the deposit as the sole remedy if the buyer defaults. The outcome depends on the contract and the facts of the situation.
Escrow will not release funds without mutual written instructions or a legal order. If a dispute arises, contracts often require mediation or arbitration first. Keep detailed written records throughout the process.
Lender review and closing
Your lender will verify the source of your earnest money during underwriting. Keep statements and proof of the transfer for escrow and for your loan file.
At closing, the deposit is applied to your costs. If you offered $10,000 in earnest money and your total cash to close is $40,000, you would bring the remaining $30,000.
Murrieta examples
- Example A: Purchase price $600,000 with a 2% deposit equals $12,000. If the sale closes, the $12,000 is credited toward your closing costs or down payment.
- Example B: Purchase price $450,000 with a flat $7,500 deposit is about 1.7%. The treatment is the same as Example A.
Actual deposit size should match the neighborhood, the price tier, and how competitive the home is.
Buyer checklist before you deposit
- Confirm the deposit amount and deadline in your purchase agreement.
- Verify escrow contact details and approved payment methods.
- Keep your inspection, loan, and appraisal contingencies in writing and track deadlines.
- Save bank documentation that shows the source of funds and transfers.
- Call your escrow officer to confirm any wiring instructions before sending money.
Seller checklist when accepting an offer
- Make sure the contract clearly states deposit type, amount, and due date.
- Confirm escrow details and that funds go into a proper escrow or trust account.
- Understand the buyer’s contingency timelines and how they affect refundability.
- If a buyer defaults, consult your agent or an attorney before trying to claim the funds.
Strategy for your offer in Murrieta
Your deposit can strengthen your offer, but it should match risk and market conditions. In a multiple‑offer setting, a larger amount can show commitment and reduce a seller’s fear of delays. In a slower segment, a smaller deposit may be acceptable.
Balance your deposit with your contingency timelines. Shorter timelines can appeal to a seller, but only choose dates you can meet. Align your financing path with your deposit strategy so you are protected if something unexpected occurs.
How an integrated team helps
Coordinating escrow, lending, and timelines reduces stress. A team that understands Murrieta’s norms and works closely with your lender helps you set the right deposit and meet every deadline. With an integrated mortgage partner, you can document funds quickly, verify timelines, and move from acceptance to closing with fewer surprises.
Key takeaways
- Earnest money in Murrieta often ranges from a few thousand dollars to about 1% to 3% of price, based on competition and price tier.
- Deposits are due shortly after acceptance, commonly within 24 to 72 hours, and are held in escrow until closing or cancellation.
- Contingencies protect your refund rights if you follow the steps and deadlines in the contract.
- Escrow will not release funds without mutual instructions or a legal order, so keep everything in writing.
- Verify any wiring instructions by phone to prevent fraud.
Ready to set the right deposit and write a winning offer in Murrieta? Reach out for local guidance and a clear plan from offer to closing. If you want coordinated lending support alongside expert representation, connect with Tiffany Williams today.
FAQs
What is earnest money in Murrieta home sales?
- It is a good‑faith deposit you provide with a signed offer that is credited to your costs at closing or potentially forfeited if you default under the contract.
How much earnest money is typical in Murrieta?
- Many buyers offer a few thousand dollars or about 1% to 3% of the price, with higher deposits in more competitive situations.
Who holds my earnest money during escrow in Riverside County?
- An escrow or title company usually holds the funds in a trust account and issues a receipt after deposit.
When is my earnest money due after offer acceptance?
- Your contract sets the deadline, commonly within 24 to 72 hours of acceptance, so confirm the exact date and time in writing.
Are earnest money deposits refundable if I cancel?
- Yes, if you cancel within your contingency period and follow the notice and documentation procedures written in your contract.
Can the seller keep my earnest money if I back out?
- If you default without a contractual reason after removing contingencies, a liquidated damages clause may allow the seller to keep the deposit.
How do I avoid wire fraud when sending my deposit?
- Call your escrow officer at a verified number to confirm wiring instructions and never rely only on email details.
How does my lender view the earnest money deposit?
- Your lender verifies the source of the funds during underwriting, so keep bank statements and transfer receipts for your loan file.
