Earnest Money in San Ramon: How It Works

Ever wondered how big your earnest money check should be when you make an offer in San Ramon? You are not alone. In the Bay Area, this deposit can feel large, and you want to get it right without taking on unnecessary risk. In this guide, you will learn what earnest money is, how it works locally, typical deposit amounts, how contingencies protect you, and smart strategies you can use this spring. Let’s dive in.

What earnest money means

An earnest money deposit, or EMD, is a good‑faith cash deposit that shows a seller you are serious. It gives the seller confidence to take the home off the market while you complete inspections, appraisal, and financing steps. If the deal closes, the EMD is applied to your down payment and closing costs. If the deal cancels, the contract describes how the deposit is returned or released.

Typical deposit amounts in San Ramon

There is no single required number. Many buyers use about 1 to 3 percent of the purchase price. In competitive Bay Area situations, some buyers offer 3 to 5 percent or more to make an offer stand out.

Here are quick examples:

• On a $1,000,000 home: 1 percent is $10,000, 3 percent is $30,000, 5 percent is $50,000.
• On a $1,500,000 home: 1 percent is $15,000, 3 percent is $45,000, 5 percent is $75,000.

Your ideal amount depends on price point, neighborhood demand, and your contingencies. Ask your agent what sellers in your micro‑market expect right now.

How and when you pay

In California, the EMD is typically deposited with an independent escrow or title company named in your purchase agreement. The escrow holder follows the written contract and escrow instructions.

Most local agreements require the initial deposit within a short window after acceptance, often 1 to 3 business days. Some offers use a smaller initial deposit, then add an additional deposit later to reach a total target amount.

A simple timeline looks like this:

1. Offer accepted. Your clock starts.
2. Deposit delivery. You send the initial EMD to the named escrow holder within the contract deadline.
3. Possible second deposit. If agreed, you add funds by the stated date.
4. Funds held in escrow. Ask if the account is interest‑bearing and how disbursements work.
5. At closing. Your EMD is applied to your down payment and closing costs.

Contingencies and your deposit

Contingencies spell out what must happen for you to move forward, and they protect your deposit when used properly. Common ones include inspection, loan, appraisal, title, and sometimes the sale of your current home.

• If you cancel within an active contingency period using the contract’s notice process, your EMD is usually refundable.
• Once you remove a contingency in writing or miss a deadline, the protection can fall away. If you default after removals, the seller may claim the deposit as liquidated damages subject to contract terms.
• If an appraisal comes in low and you have an appraisal contingency, you can cancel and recover the EMD or negotiate. Without that contingency, you may need to bring extra funds or risk losing your deposit.
• If your loan is denied within the loan contingency period and you cancel correctly, your EMD is typically returned.

Smart deposit strategies

Balance competitiveness with risk tolerance. Spring often brings multiple offers in Contra Costa, so plan ahead.

Conservative

• 1 percent EMD, keep standard inspection and loan contingencies.
• Pros: Lower cash up front, strong protection.
• Cons: May be less competitive against larger deposits or shortened timelines.
• Use when: You value protection or the market is balanced.

Competitive but safe

• 2 to 3 percent EMD, shorten inspection to about 5 to 7 days, keep loan and appraisal contingencies.
• Pros: Signals seriousness while keeping core protections.
• Cons: Requires more cash and quick scheduling.
• Use when: Homes get multiple offers and you want a solid middle ground.

Aggressive

• 5 percent or more EMD, consider limited or waived contingencies, or a small non‑refundable portion.
• Pros: Very strong signal to sellers.
• Cons: Higher financial risk if you back out or cannot close.
• Use when: You have high confidence in financing and property condition.

Quick cash examples on a $1,000,000 home: 1 percent is $10,000, 3 percent is $30,000, 5 percent is $50,000. Choose a number that fits your comfort and the property’s competitiveness.

What happens if a deal falls through?

If you cancel under an active contingency per the contract, the EMD typically goes back to you. If the seller fails to perform, you generally can recover your deposit. If both sides disagree, escrow will usually hold the funds until you reach an agreement or a decision is made under the dispute‑resolution clause.

Documentation matters. Keep proof of deposit delivery, written contingency removals, lender updates, and any cancellation notices.

Quick checklist before you offer

• Confirm the escrow holder and deposit deadlines in your offer.
• Plan your total deposit and whether you will use an additional deposit.
• Book inspections and appraisal early to meet shorter timelines.
• Clarify contingency periods and how to give notice if you need to cancel.
• Ask escrow how funds are held, whether interest applies, and how refunds are processed.
• Coordinate with your lender on loan approval timing so you do not miss deadlines.

Final thoughts and next steps

Your earnest money is a tool. The right amount and the right protections can help you win the home without taking on more risk than you intend. In San Ramon and across Contra Costa, practices vary by neighborhood and season, so tailor your approach to each home and seller.

If you want a quick read on deposit norms for a specific property and how to structure contingencies, reach out to Conor Dunn. You will get local context, a clear plan, and calm guidance from offer to close.

FAQs

What is earnest money in San Ramon?

• It is a good‑faith deposit that shows a seller you are serious, held in escrow and applied to your down payment and closing costs at closing.

How much earnest money is typical locally?

• Many buyers use about 1 to 3 percent of the price, with 3 to 5 percent common in more competitive situations depending on the home and market.

When is the deposit due after acceptance?

• Your contract sets the deadline, and many local agreements call for delivery within 1 to 3 business days of acceptance.

Who holds the earnest money in California?

• An independent escrow or title company, or a brokerage trust account named in the contract, follows written escrow instructions.

Is my earnest money refundable if I cancel?

• Usually yes if you cancel within an active contingency period using the contract’s process; after removing contingencies, the deposit can become non‑refundable if you default.

What if the appraisal comes in low in Contra Costa?

• With an appraisal contingency, you can cancel and recover your deposit or negotiate; without it, you may need extra cash or risk losing the EMD.

Should I ever make part of my deposit non‑refundable?

• Some buyers do in very competitive situations, but it increases your risk, so use caution and get guidance before committing.