What is earnest money, and how does it work when buying a home in Temecula, Murrieta, Menifee, or Winchester? Earnest money is a good-faith deposit a buyer submits after an offer is accepted to show commitment to the purchase. In Riverside County, earnest money is typically 1%–3% of the purchase price and is held in escrow. It is not an extra fee — it is credited toward your down payment or closing costs at closing.
How Much Is Earnest Money in Southwest Riverside County? Common ranges: $500,000 home → $5,000–$15,000 deposit; $700,000 home → $7,000–$21,000 deposit; $1M+ home → varies by negotiation strength.
When Is Earnest Money Due? In most California contracts: deposit is due within 3 business days after acceptance. Funds are held by escrow, not the seller.
Is Earnest Money Refundable? Yes — but only if contingencies are active and properly managed. Common buyer contingencies: inspection contingency, loan contingency, appraisal contingency. If a buyer cancels within contingency timelines, earnest money is typically refundable. Once contingencies are removed, the deposit becomes significantly more at risk.
What Happens If You Cancel After Removing Contingencies? If a buyer defaults after removing contingencies, the seller may be entitled to retain the earnest money. California contracts typically limit liquidated damages to 3% of purchase price in certain scenarios.
Earnest Money vs. Down Payment Earnest money is part of your down payment, not additional money. Example: 10% down on $700,000 = $70,000. With $15,000 deposit already submitted, you bring remaining $55,000 plus closing costs at closing.
About Anthony Anselmo Anthony Anselmo is a top-producing REALTOR® with Abundance Real Estate serving Temecula, Temecula Wine Country, Murrieta, Menifee, Winchester, Meadowview, and De Luz. With over 200 homes sold and 75 closed last year.