Making an offer on a Portland home? Your earnest money is often the first signal to a seller that you are serious and ready to perform. If you are a first‑time or move‑up buyer, you might worry about how much to put down and what happens if a deal falls apart. In this guide, you will learn typical earnest money amounts in the Portland metro, who holds the funds, key timelines, and exactly when your deposit is refundable under common Oregon contingencies. Let’s dive in.
What earnest money is
Earnest money is a good‑faith deposit you make after your offer is accepted. It shows the seller you intend to move forward and, if you close, it becomes part of your funds for the purchase or closing costs. The purchase agreement sets the amount, when it is due, who holds it, and what happens if the sale does not close.
In Oregon, standard purchase forms include earnest‑money clauses that spell out these details. The contract controls everything, so the specific deadlines and contingency language you agree to will determine whether your money is protected.
How much to offer in Portland
There is no single number that fits every property. Here are common patterns Portland buyers use:
- Percentage approach: Many buyers offer about 1% to 3% of the purchase price.
- Fixed ranges: In everyday Portland‑area transactions, you often see $1,000 to $10,000. For many mainstream single‑family homes in competitive neighborhoods, $5,000 to $10,000 is typical.
- Market sensitivity: In hot submarkets with multiple offers, some buyers increase to 3% to 5% or more to stand out. In slower segments or at lower price points, deposits around $1,000 to $2,500 can still be effective.
The smart move is to balance credibility with protection. A larger deposit can strengthen your offer, but it should align with the contingencies you want to keep, like inspection, appraisal, and financing.
Who holds your deposit
Your purchase agreement will name the holder. In Portland‑area practice, the earnest money is commonly placed with a title or escrow company. In some cases, it may be held by the seller’s brokerage or your broker’s trust account. Whoever holds it must follow strict rules for client funds and provide receipts.
Always confirm who will hold the deposit, how you will deliver it, and how they will release it at closing or if the deal terminates.
When it is due and how to pay
The contract sets the deadline. In our market, it is common to see the deposit due within a short window after mutual acceptance, often 1 to 3 business days. Your exact timing may differ based on the contract language.
Payment methods vary by escrow or brokerage. Certified check and wire transfer are common. For larger deposits, wire transfer is typical. Always verify wiring instructions by calling the escrow or title company using a known, trusted phone number to guard against wire‑fraud attempts. Keep your receipt and confirm the funds were received.
When your earnest money is refundable
Your right to a refund depends on the contingencies in your contract, the deadlines, and how you deliver notice. Here are the major ones and typical outcomes in Oregon practice.
Inspection contingency
- What it does: Gives you a set period to inspect, request repairs or credits, or terminate.
- Refundability: If you terminate during the inspection window following the contract’s notice rules, your deposit is typically refundable. If you accept the property or miss the deadline, refund rights may be lost.
Financing contingency
- What it does: Makes your purchase subject to obtaining a loan by a set date.
- Refundability: If you cannot secure financing and you timely terminate under the financing contingency after taking required good‑faith steps, your earnest money is usually refundable. Missing deadlines or failing to act in good faith can put the deposit at risk.
Appraisal contingency
- What it does: Protects you if the property appraises below the purchase price.
- Refundability: If the appraisal is low and you invoke the contingency on time per the contract, you can usually cancel and receive a refund.
Title and boundary contingencies
- What they do: Let you review title, recorded documents, and boundary issues.
- Refundability: If unacceptable title exceptions are found and you terminate within the allowed period under the contract terms, the deposit is typically refundable.
Sale‑of‑home contingency
- What it does: Makes your purchase contingent on the sale of your current home.
- Refundability: If your home does not sell and you terminate within the contingency period as required, your deposit is generally refundable.
Seller breach
- If the seller fails to perform, your earnest money is generally refundable. You may also have additional remedies under the contract.
Buyer breach
- If you back out after removing or missing contingencies without a contractual reason, the seller may be entitled to the earnest money as liquidated damages if the contract allows. This is the key risk of offering a large deposit without protections.
Timing and notice matter
- Most refunds hinge on hitting the deadlines and delivering the right notice in the right way. Many contracts specify that notice must be in writing and delivered by certain methods. Missing the timing or using the wrong notice method is a common reason buyers lose their deposit.
What happens in a dispute
Escrow holders must act impartially. If there is a dispute over who gets the earnest money, the escrow or title company will hold the funds until both sides sign mutual release instructions or a court or arbitrator orders disbursement. Many Oregon purchase agreements include mediation or arbitration steps for resolving disputes. Because legal action can be slow and expensive, parties often negotiate a resolution using the dispute‑resolution options written into the contract.
Step‑by‑step: Protect your earnest money
Use this quick checklist to reduce risk and keep your deposit safe.
- Read your contract dates carefully
- Note the deposit due date, inspection window, financing and appraisal deadlines, and any title review periods. Put them on your calendar with reminders.
- Confirm the escrow holder
- Know exactly who will hold the funds. Ask for written confirmation when your deposit is received and where it is held.
- Choose the right amount
- Aim for 1% to 3% or a flat amount like $5,000 to $10,000 for many Portland‑area homes. Increase only if the market is very competitive and your contingencies fit your risk comfort.
- Move fast on inspections
- Schedule inspections immediately and provide any requests or termination notices in writing, before the deadline, using the delivery methods the contract allows.
- Stay proactive with your lender
- Apply promptly and provide all documentation so you meet financing deadlines in good faith. If financing fails, you will need to show you complied with your contingency.
- Use secure payment methods
- For wires, confirm instructions by phone using a verified number for the escrow or title company. Do not rely on email‑only instructions.
- Keep a paper trail
- Save deposit receipts, inspection reports, all written notices, and any lender denial letters. Documentation supports your refund rights.
- Understand dispute‑resolution terms
- Ask your agent to explain any mediation, arbitration, or escrow dispute clauses so you know the path if disagreement arises.
- Consider legal help for complex cases
- For unusually large deposits or complicated contingencies, a real estate attorney can review the contract language before you commit.
Portland buyer scenarios
Here are a few common ways buyers size deposits in our market.
Entry‑level condo with no bidding war: You might offer a flat $2,500 earnest deposit and keep full inspection, financing, and appraisal contingencies. Your deposit stays well protected because you can cancel within those windows if needed.
Mid‑range single‑family home with moderate competition: A deposit around 1% to 2% of price or $5,000 to $10,000 is a common range. You might keep all contingencies but commit to faster timelines to strengthen your offer.
Hot listing with multiple offers: Some buyers go to 3% to 5% of price to stand out. If you do this, be sure your inspection, appraisal, and financing contingencies match your risk tolerance and that you can meet tight deadlines.
The best choice blends credibility with protection. A strong, well‑structured offer often wins without taking unnecessary deposit risk.
Common pitfalls to avoid
- Missing a contingency deadline. Even a day late can change your refund rights.
- Giving verbal notice. Most contracts require written notice delivered in a specific way.
- Delaying your loan application. If you fail to act in good faith, your financing contingency may not protect you.
- Ignoring wire‑fraud safeguards. Always verify wiring instructions by phone with a trusted number.
- Over‑depositing without protections. A very large deposit with minimal contingencies can expose you to avoidable loss.
The bottom line for Portland buyers
Your earnest money is a powerful part of your offer and a key area of risk to manage. In the Portland metro, typical deposits range from $1,000 to $10,000 or about 1% to 3% of price, with higher amounts used in competitive situations. The contract controls everything, so your timelines and contingencies determine refundability. If you follow the deadlines, deliver proper notices, and keep a clear paper trail, you can make a compelling offer while protecting your deposit.
If you want help sizing your deposit and structuring contingencies that fit the neighborhood and the seller’s expectations, reach out to Shelley Lucas. You will get local insight, precise timeline management, and a calm guide through escrow from offer to keys.
FAQs
What is earnest money in Oregon home purchases?
- It is a good‑faith deposit you pay after offer acceptance. It shows seriousness, is held by escrow or a brokerage, and is applied to your purchase at closing.
How much earnest money do Portland buyers usually put down?
- Many offers land around 1% to 3% of price or a flat $1,000 to $10,000, with $5,000 to $10,000 common for many single‑family homes in competitive areas.
Who holds the earnest money in Portland deals?
- Typically a title or escrow company holds the funds, though some deposits go to a brokerage trust account. The purchase agreement names the holder.
When is earnest money refundable in Oregon?
- It is usually refundable if you cancel within a valid contingency period, such as inspection, financing, appraisal, title, or sale‑of‑home, and you give proper written notice on time.
What if the seller and buyer disagree about the deposit?
- The escrow holder will keep the funds until both parties sign a mutual release or a court or arbitrator orders disbursement. Many contracts include mediation or arbitration steps.
How fast do I need to deposit earnest money in Portland?
- The contract sets the deadline. In local practice it is often due within 1 to 3 business days of mutual acceptance, but always follow your specific contract dates.
