Writing an offer in Fremont and not sure how much earnest money to put down? You are not alone. First-time buyers often worry about wiring thousands of dollars and what happens if a deal falls apart. In this guide, you will learn what earnest money is, how it works in California, typical amounts for the Fremont area, and how contingencies can protect your funds. Let’s dive in.
Earnest money basics in California
Earnest money, also called an earnest money deposit, is a good-faith amount you put down when a seller accepts your offer. It shows you are serious about the purchase. It is not an extra fee. If the sale closes, your deposit is credited toward your down payment and closing costs.
In California, your deposit is held by a neutral escrow or title company. Escrow is licensed and regulated by the state, and funds are kept in a trust account until closing or a contract outcome. You can learn more about escrow oversight through the California Department of Financial Protection and Innovation. The safest practice is to confirm the escrow company named in your purchase contract and follow its written instructions.
Your purchase agreement will state when the deposit is due. In the East Bay, it is common to deliver funds to escrow within 1 to 3 business days after offer acceptance, but the exact timeline is negotiated. If you cancel under a valid contingency within the agreed period, your deposit is typically refundable. If you breach the contract without a valid contingency, the seller may be entitled to keep the deposit as liquidated damages or pursue other remedies.
For general homebuyer guidance and to understand standard California forms, the California Association of REALTORS provides useful resources.
How much do Fremont buyers deposit?
Fremont is part of a high-cost Bay Area market where competition can be strong, especially for well-located homes. Deposit expectations vary with market conditions and how competitive the offer needs to be.
- In a typical market, buyers often put down about 1 to 3 percent of the purchase price.
- In hotter, multiple-offer situations, buyers sometimes offer 3 to 5 percent or more to show commitment.
Here are simple examples so you can picture the numbers:
- On an $800,000 home, 1 percent is $8,000 and 2 percent is $16,000.
- On a $1,200,000 home, 1 percent is $12,000 and 2 percent is $24,000.
- On a $1,800,000 home, 1 percent is $18,000 and 2 percent is $36,000.
Local practice also matters. Sellers often prefer larger, timely deposits because it signals strong follow-through. Your agent will usually negotiate deposit size and contingency timelines together. A larger deposit may be paired with shorter contingency periods, while a smaller deposit may be balanced with standard contingency windows.
Contingencies that protect your deposit
Contingencies are contract clauses that let you cancel under specific conditions and recover your deposit if you act within the agreed deadlines.
Loan or financing contingency
This protects you if your purchase depends on obtaining a mortgage. If you are denied financing despite acting in good faith and providing your lender what is needed, you can cancel within the contingency period and recover your deposit. Your lender’s denial letter is usually required for the release of funds.
Appraisal contingency
If the property appraises below the agreed price, this contingency gives you options. You can negotiate a price change, bring additional cash, or cancel within the appraisal period and recover your deposit. In very competitive markets some buyers waive appraisal protection, which raises deposit risk if the appraisal comes in low.
Inspection contingency
This lets you inspect the home and decide whether to proceed or request repairs or credits. You typically have a set window, often about one to two weeks, to complete inspections. If you cancel within this window, your deposit is usually returned. If you remove the contingency or miss the deadline, your deposit becomes more exposed.
Title and documents
During escrow, you review the preliminary title report and other documents. If there are unresolved title defects or unacceptable restrictions and your contract allows for cancellation, you can withdraw and protect your deposit. For county-level information and records, Alameda County’s official site is a helpful starting point.
HOA and seller disclosures
If the property is in an HOA, you will review the association documents. State-required disclosures also apply. If material issues arise and your contract permits cancellation within the review period, you can typically recover your deposit.
Deadlines and good-faith actions
Your deposit protection depends on meeting contract timelines and acting in good faith. That means applying for your loan promptly, providing your lender documents on time, ordering inspections right away, and giving written notices before deadlines. If a dispute arises about release of funds, escrow follows the contract and escrow instructions, and may require written mutual agreement or a court or arbitration order.
Checklist to prepare your offer
Use this quick list before you write an offer in Fremont:
- Get fully pre-approved, not just pre-qualified, and have your letter ready.
- Decide on deposit size with your agent based on market conditions, your price point, and your risk tolerance.
- Confirm available cash, including earnest money plus down payment and closing costs.
- Identify the escrow company and delivery method. Verify wiring instructions by calling a known phone number to avoid fraud.
- Set realistic contingency timelines. Shorter windows can make your offer more competitive but raise risk if delays occur.
- Consider strategies like a larger deposit or appraisal gap language only after weighing the trade-offs.
- Keep everything in writing. Save lender updates, inspection reports, and any contingency removals or cancellation notices.
- Ask about the seller’s expectations for deposit timing and contingency length.
Sample buyer strategies
- Conservative in a balanced market: 1 percent deposit, standard inspection and loan contingencies, typical timeframes.
- Competitive in a multiple-offer: 2 to 3 percent deposit, shorter inspection window, reserve the right to cancel under loan contingency.
- Cash buyer: larger deposit to signal commitment, very short escrow, minimal contingencies.
Your local team
Buying well in Fremont is a team effort. You will coordinate with a local real estate agent, a licensed escrow or title company, your mortgage lender, and a licensed home inspector. If complex issues arise, some buyers also consult a real estate attorney. To verify escrow licensing and consumer information, visit the California Department of Financial Protection and Innovation.
Work with a local guide you can trust
A clear plan for your deposit and contingencies can make your offer stronger without taking on unnecessary risk. If you want tailored guidance on deposit size, timelines, and offer strategy in Fremont, reach out for a one-on-one strategy session with Moni Shah. You will get local insight, patient explanations, and a step-by-step game plan for your next offer.
FAQs
What is earnest money in a California home purchase?
- It is a good-faith deposit you place after your offer is accepted. The funds are held in escrow and are applied to your down payment and closing costs if the sale closes.
Who holds my deposit in Fremont and the East Bay?
- A neutral escrow or title company holds it in a trust account until closing or a contract resolution, consistent with California oversight.
How much earnest money do Fremont buyers usually put down?
- In many cases it is about 1 to 3 percent of the price. In competitive situations, some buyers offer 3 to 5 percent or more to strengthen the offer.
When is my deposit due after offer acceptance?
- The purchase agreement sets the deadline. It is commonly 1 to 3 business days after acceptance, but timing is negotiated.
How do contingencies protect my earnest money?
- If you cancel within an active contingency period, such as loan, appraisal, or inspection, your deposit is typically returned according to the contract.
What happens if the appraisal comes in low and I waived protection?
- You may need to bring additional cash or renegotiate. Without appraisal protection, canceling could put your deposit at risk.
Can the seller keep my deposit if my loan is denied?
- If you have a valid loan contingency and you acted in good faith, you can usually cancel and recover your deposit with lender denial documentation.
What if the buyer and seller disagree about releasing the deposit?
- Escrow follows the contract and instructions. If there is no agreement, escrow may require written mutual instructions or a court or arbitration order.
How do I avoid wire fraud when sending my deposit?
- Only use written instructions from the named escrow company and verify by calling a trusted phone number before wiring funds.
California Department of Financial Protection and Innovation | California Association of REALTORS | Alameda County
