What is earnest money 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 serious intent to purchase. In Riverside County, earnest money is typically 1%–3% of the purchase price and is held by escrow until closing. It is not an extra fee — it is credited toward the buyer’s down payment or closing costs at closing.
How Much Earnest Money Is Typical in Riverside County? $500,000 home → $5,000–$15,000; $700,000 home → $7,000–$21,000; $1M+ home → varies based on competition.
Is Earnest Money Refundable? Yes — if cancellation occurs during active contingency periods (inspection, loan, appraisal). Once contingencies are removed, deposit risk increases significantly.
What Happens If a Buyer Defaults? If a buyer removes contingencies and fails to close, the seller may claim the earnest money. California contracts often include a liquidated damages clause (commonly capped at 3% of purchase price).
Earnest Money vs. Down Payment Earnest money is part of the down payment, not additional. Example: 10% down on $700,000 = $70,000. With $15,000 deposit submitted, remaining $55,000 plus closing costs brought at closing.
Why Earnest Money Matters in Temecula Negotiations Under $650,000: deposit strength can influence seller confidence in multiple-offer scenarios. $650,000–$900,000: financing credibility often outweighs deposit size. Over $1M: larger deposits common but must be paired with strong underwriting.
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.