Buying in Del Mar often means writing a serious offer on a home you love. One key piece is your earnest money deposit. If you are wondering how much to put down, when it is refundable, and how it is protected, you are not alone. In this guide, you will learn how earnest money works in California, what is typical in Del Mar, and smart ways to compete without taking on unnecessary risk. Let’s dive in.
Earnest money basics in California
Your earnest money is a good-faith deposit that you deliver after a seller accepts your offer. In California, it is applied to your cash to close if the sale moves forward. This deposit demonstrates commitment to the seller while escrow is open.
The deposit is held by the escrow holder named in your purchase contract. That is often an escrow or title company that follows the written instructions in the agreement. For a plain-language overview of escrow’s role, you can review guidance from the California Department of Real Estate.
Most San Diego County transactions use forms based on the California Association of Realtors Residential Purchase Agreement. These documents spell out the deposit amount, when it is due, and the rules for contingency removal and default. For background on standard contract options and consumer education resources, see the California Association of Realtors.
If you cancel within an allowed contingency period, your deposit is typically returned per the contract. If contingencies are removed and you later default, a seller may seek to keep the deposit as liquidated damages or pursue other remedies, depending on the contract. Escrow cannot release funds unless both parties authorize or a mediator, arbitrator, or court directs disbursement.
How much earnest money in Del Mar
Across California, a common range is 1 to 3 percent of the purchase price. In Del Mar, prices are higher than most of the county, so even a 1 percent deposit is a large dollar amount.
Here are examples to frame expectations. These are illustrative and vary by property and market conditions:
- Around $1,000,000 purchase price: 1 percent is $10,000. Typical deposits might be $10,000 to $30,000.
- Around $2,500,000 purchase price: 1 percent is $25,000. Competitive offers may show $50,000 to $100,000 or more.
- Around $5,000,000 purchase price: 1 percent is $50,000. Deposits can range from $50,000 up to a few hundred thousand dollars.
In multiple-offer situations, some buyers raise the deposit percentage or agree to deliver funds faster to signal strength. You should expect to provide proof of funds for the deposit and have money ready to wire or deliver by cashier’s check in the name specified in the contract.
Factors that influence deposit size include:
- Price point and property uniqueness
- Competition and the number of offers
- Whether you are waiving or shortening contingencies
- Your financing plan and ability to close on a fast timeline
Contingencies and your protection
Contingencies are conditions and deadlines that protect your deposit while you investigate the property and financing. If you cancel within a contingency period using the contract’s procedures, you typically recover your deposit.
Common contingencies in California include:
- Inspection contingency. Allows time to inspect and negotiate repairs. If issues are unacceptable, you can cancel within the period.
- Financing or loan contingency. Protects you if you cannot obtain your loan under agreed terms by the deadline.
- Appraisal contingency. Covers a shortfall if the appraisal comes in below price and you are not prepared to bridge the gap.
- Title contingency. Gives you time to review the preliminary title report and raise objections.
- Sale-of-home contingency. Less common in competitive markets, but it conditions your purchase on selling your current home.
Contingencies must be removed in writing. Once you remove or allow a contingency to expire, you generally cannot rely on it to cancel and retrieve your deposit. Waiving an appraisal or loan contingency increases deposit risk because you may need extra cash if the appraisal is low or financing fails. For consumer-friendly context on mortgage and appraisal considerations, see the Consumer Financial Protection Bureau.
Many standard contracts include a liquidated damages clause and mediation or arbitration provisions for deposit disputes. These details are built into typical California forms. You can review general contract education resources at the California Association of Realtors.
Timelines buyers see in Del Mar
Your purchase contract sets key dates. In San Diego County, these are common ranges. Your exact terms will be negotiated with the seller.
- Earnest money due: usually within 24 to 72 hours after acceptance
- Inspection period: often 7 to 10 days in faster markets, up to 17 days in some cases
- Loan contingency: often 17 to 21 days, sometimes longer depending on lender
- Appraisal ordered: typically within the first 7 to 21 days
- Title review: preliminary report often arrives in the first 1 to 2 weeks
- Escrow length: commonly 30 to 45 days, with luxury or complex deals sometimes longer
In multiple-offer settings, sellers often ask for shorter contingency periods and a 30-day closing. For a pulse on local market pace and norms, you can refer to the San Diego Association of Realtors.
Sample timelines
Typical offer
- Earnest money: due within 48 hours
- Inspection: 10 days
- Loan contingency: 21 days
- Closing: 30 to 45 days
Competitive Del Mar offer
- Earnest money: higher amount or 3 percent, initial deposit within 24 hours with additional funds due in 3 days
- Inspection: 5 to 7 days
- Loan contingency: 17 days or less if well qualified
- Appraisal contingency: waived or limited by an appraisal gap amount
- Closing: about 30 days
Missing a contingency deadline without a written extension increases risk to your deposit. Delivering the deposit late can also violate the contract unless the seller agrees in writing.
How escrow holds and releases your deposit
Escrow is a neutral third party that holds your funds and follows the contract instructions. The escrow holder will not release your earnest money unless both parties authorize or there is a decision from a mediator, arbitrator, or court.
To keep your deposit on track:
- Confirm the escrow holder listed in your contract matches the instructions you receive.
- Send your deposit within the deadline and obtain a receipt or wire confirmation from escrow.
- Keep copies of everything for your records.
- Ask your agent to verify that contingency removals and any extensions are documented in writing.
You can find general escrow information at the California Department of Real Estate.
Ways to strengthen your offer without excess risk
You can write a competitive offer while still protecting your deposit. Consider these practical moves:
- Increase the deposit amount but keep core contingencies. A larger deposit signals strength, while inspection, appraisal, and loan protections manage risk.
- Shorten but do not waive inspections. A 5 to 7 day inspection period shows speed and still gives you a window to assess the home.
- Use a capped appraisal gap. If appropriate for your finances, you can agree to cover a set dollar amount above the appraised value rather than waiving the appraisal outright.
- Stage deposits in two parts. Some contracts call for an initial deposit at acceptance, with an additional deposit due after a short period. This can satisfy a seller’s desire for commitment while giving you time for early diligence.
- Coordinate with your lender. Make sure the loan timeline can support any shortened contingency or closing dates before you commit to them in writing.
Real-world scenarios
Scenario A - Standard risk profile
- Offer price: $1.5 million
- Earnest money: $15,000 at 1 percent
- Inspection: 10 days, loan contingency: 21 days, closing: 30 days
- Outcome: Significant issues surface. You cancel within the inspection window and recover the deposit.
Scenario B - Competitive Del Mar bid
- Offer price: $2.8 million
- Earnest money: $84,000 at 3 percent
- Inspection: 5 days, loan contingency: 17 days, appraisal waived with a $20,000 gap cap
- Risk: If financing fails after contingencies are removed or the appraisal is far below price, you may forfeit the deposit.
Scenario C - Cash buyer
- Earnest money: sizable deposit, for example $100,000
- No loan contingency, shortened inspection period
- Risk centers on inspection and title. Deposit is credited at closing.
What this means for you in Del Mar
Your deposit is a powerful tool. In Del Mar’s upper-tier market, you will likely see larger dollar amounts, faster timelines, and pressure to trim contingencies. The key is to balance strength and safety. A clear plan for deposit size, delivery, and contingency strategy helps you compete while keeping your goals intact.
If you want a tailored plan for your target neighborhoods and price point, our team is here to help you calibrate deposit amounts, timelines, and terms that fit your comfort level.
Ready to talk strategy for your next Del Mar offer? Book a complimentary consultation with Colucci & Co. and get a clear path from first showing to keys in hand.
FAQs
What is earnest money in California home purchases?
- It is a good-faith deposit you deliver after offer acceptance. The escrow holder keeps it during the transaction and it is credited to you at closing if the sale completes.
Who holds my earnest money in San Diego County?
- The escrow holder named in your contract, such as an escrow or title company, holds the funds and follows written instructions from the agreement.
When is my deposit refundable in Del Mar deals?
- If you cancel within an active contingency period per the contract, your deposit is typically returned. After you remove contingencies, the deposit usually becomes nonrefundable except for specific seller breaches or remedies in the contract.
How fast do I need to deliver the earnest money?
- Many contracts call for delivery within 24 to 72 hours after acceptance. Your exact deadline will be in your purchase agreement.
What happens if the appraisal is low but I waived the appraisal contingency?
- You may need to bring extra cash or renegotiate. If you cannot close and contingencies are already removed, you risk losing your deposit.
Can a seller keep my deposit if they back out of the sale?
- If the seller breaches while you perform under the contract, you may be entitled to a return of your deposit and other remedies based on the agreement and facts. Escrow will not release funds without proper authorization or a decision from a mediator, arbitrator, or court.
