What Is Earnest Money in Real Estate? A Portland Buyer’s Guide
Thinking about buying a home in the Portland area? Whether you’re dreaming of a craftsman in Wilsonville, a townhome in Tualatin, or a quiet retreat in Sherwood, you’ll want to understand earnest money—a key part of the home buying process that can either protect your investment or cost you thousands. Let’s break it down together so you feel confident (not confused) when it’s time to make your offer.
1. What is Earnest Money?
Earnest money is a good faith deposit you submit when making an offer on a home. It shows the seller you’re serious and ready to move forward—kind of like saying “I’m all in.” If all goes well, the money is later applied toward your down payment or closing costs.
2. What’s Typical for Earnest Money in the Portland Area?
In the Portland metro area, including hot spots like Wilsonville, Sherwood, and Tualatin, earnest money is typically 1–3% of the purchase price. For a $500,000 home, that’s $5,000 to $15,000. Competitive offers may lean higher, especially in multiple-offer situations.
3. Can You Lose Your Earnest Money?
Yes—if you break the contract without a contingency in place. That’s why it’s so important to understand your exit options. For example, if you back out because of a failed inspection or financing (and you included those contingencies), you’ll typically get your deposit back.
4. How to Protect Yourself as a Buyer
Working with a local, experienced agent (🙋♀️ hi, that’s me!) is key. I’ll help you:
- Avoid risky contract loopholes
- Write strong offers with proper contingencies
- Stay ahead of deadlines
- Understand your inspection and financing timelines
5. 🎁 Bonus: Free Buyer Guide
Ready to house hunt like a pro? I created a free buyer guide that walks you through every step—from offer to closing—with local insights, tips, and red flags to watch for.
