Earnest Money in Folsom: How Much and When It’s Due

Buying in Folsom and wondering how much earnest money to put down and when you need to pay it? You are not alone. Your deposit can make your offer stand out, and it also protects the seller while the home is off the market. In this guide, you will learn typical deposit amounts in Folsom, when the money is due, how refund rules work, and practical steps to keep your funds safe. Let’s dive in.

Earnest money basics in Folsom

An earnest money deposit is a good‑faith payment you make with your offer to show you are serious about buying. In California, the purchase contract and escrow instructions control how the deposit is handled. Your deposit is held in escrow and applied to your down payment or closing costs when you close. If the deal does not close, what happens next depends on the contract and any contingencies you kept or removed.

The escrow or title company named in your contract usually holds the deposit in a trust account. California brokers and escrow holders must follow state trust fund rules, as outlined by the California Department of Real Estate. You can review those consumer protections by visiting the California DRE’s website and reading about its trust fund oversight.

How much earnest money to offer

In many California markets, including Folsom, buyers often offer 1% to 3% of the purchase price as earnest money. In multiple‑offer situations, buyers sometimes increase the deposit to 3% to 5% to look stronger. In calmer conditions or for lower‑priced homes, you might see a flat dollar amount.

Folsom price point examples

• On a $600,000 home, 1% is $6,000 and 2% is $12,000.
• On a $900,000 home, 1% is $9,000 and 2% is $18,000.

These examples help you compare options, but there is no single standard number. Your choice should fit the property, the competition level, your risk tolerance, and the contingencies in your offer.

Factors that influence your deposit

• Market competition and inventory in Folsom at the time you offer.
• Your financing strength and comfort with risk.
• Whether you keep or remove contingencies.
• Seller expectations and advice from your agent.

When the deposit is due

Your contract sets the deposit deadline. Common practice is to make the deposit upon mutual acceptance or within a short window, often 24 to 72 hours after acceptance. Read the timeline in your agreement so you can move funds on time. In some cases, you might see an initial deposit followed by an additional deposit later in the process.

How to deliver funds safely

• Acceptable methods include check, cashier’s check, wire transfer, or ACH to the escrow or title company named in your contract.
• If you wire funds, verify the wiring instructions by calling the escrow or title company using a phone number you trust. Do not rely only on email instructions.
• Always get a written receipt showing the date, amount, and where the deposit is held.
• If funds are delivered to a brokerage, California trust fund rules require prompt deposit into a client trust account. For more on trust funds and consumer protections, review the California Department of Real Estate’s guidance on its official site.

When your deposit is refundable

Your deposit can be refundable if you cancel within a valid contingency period defined in your contract. Common contingencies include inspection, loan, appraisal, and title. If the seller cannot deliver what the contract requires, such as clear title, you may also be entitled to a refund. Escrow usually needs a written release signed by both parties to disburse funds, so refunds can take time to process.

Contingencies that protect you

• Inspection contingency. You can cancel within the inspection period if you decide not to proceed, following the contract terms.
• Loan contingency. If you cannot secure financing within the agreed time, you can cancel and protect your deposit.
• Appraisal contingency. If the appraisal comes in low, you can renegotiate or cancel per the clause.
• Title contingency. If there are unresolved title issues, you can cancel.

When you could forfeit the deposit

If you remove contingencies in writing and later default without a protected reason, the seller may claim the deposit as damages under a liquidated damages clause if your contract includes one. If contingency deadlines pass and you breach the contract, the seller may also have remedies that include keeping the deposit. The exact outcome depends on the contract and the facts of the situation.

Buyer checklist: Folsom earnest money

Before you write an offer:

• Choose a deposit amount that fits the property and market. Use 1% to 3% as a starting guideline.
• Confirm your funds are ready to transfer quickly.

In your purchase agreement:

• Specify the exact deposit amount and due date, for example, within 48 hours of acceptance.
• Name the escrow or title company that will hold the deposit.
• Set clear deadlines for inspection, loan, and appraisal.
• Decide with your agent whether to select a liquidated damages clause.

When you deliver funds:

• Send funds only to the escrow holder named in the contract.
• Get a written receipt showing the deposit and who is holding it.
• Verify wire instructions directly with the escrow company to avoid fraud.

Protecting refundability:

• Keep your contingencies until you are ready to proceed and meet all deadlines.
• Cancel in writing within the contingency period if you decide not to move forward.
• Understand that removing contingencies increases risk to your deposit.

If a dispute arises:

• Do not authorize disbursement until you understand the agreement and next steps.
• Contact your agent and escrow officer right away. Mediation or legal counsel may be appropriate.

Seller perspective: what to expect

Sellers often view a larger deposit as a sign of commitment. Make sure the deposit arrives to escrow on time and that you receive confirmation. If a buyer defaults, available remedies depend on your contract, including whether a liquidated damages clause applies. Work with your agent and escrow to follow written instructions and use standard release forms to avoid mishandling.

Key contract clauses to review

Ask your agent to point you to these sections in the California purchase agreement:

• Earnest money amount and deposit due date.
• Escrow holder’s name and where funds will be held.
• Contingency timelines for inspection, loan, appraisal, and title.
• Liquidated damages selection and its effect on the deposit.
• Escrow dispute or mediation provisions and the process for release of funds.

Local tips to keep your funds safe

• During multiple‑offer situations in Folsom, sellers may expect deposits to clear quickly. Prepare your bank ahead of time.
• Use secure communication. Call your escrow officer to confirm wiring details, and never rely on an email alone.
• Keep records. Save copies of your signed offer, escrow instructions, receipts, and any written contingency notices.
• For general consumer protections and trust account guidance, review the California Department of Real Estate’s resources.

The bottom line for Folsom buyers and sellers

Your earnest money shows commitment and helps secure a home in a competitive Folsom market. Decide on an amount that fits the property and your comfort level, understand your contingency timelines, and protect yourself with careful delivery and documentation. Clear contract terms and prompt communication keep your funds safe and your deal on track.

If you want a hands‑on plan for your offer and deposit strategy, connect with a local advisor who handles the details with care. Contact Tiegen Boberg for direct, white glove service and local guidance across Folsom and the eastern Sacramento suburbs.

FAQs

What is earnest money in a California home purchase?

• It is a good‑faith deposit that shows you are serious about buying, held in escrow and applied to your closing costs or down payment at closing.

How much earnest money is typical in Folsom?

• Many offers use 1% to 3% of the price, with higher deposits in competitive situations and lower flat amounts in calmer markets.

When is earnest money due after my offer is accepted?

• The contract sets the deadline, commonly upon mutual acceptance or within 24 to 72 hours of acceptance.

Can I get my earnest money back if financing falls through?

• If you kept a loan contingency and cancel within its timeline, you can usually recover your deposit per the contract terms.

Where is my earnest money held during escrow in Folsom?

• Your funds are held by the escrow or title company named in your contract, or in a broker trust account, under California trust fund rules.

How does a liquidated damages clause affect my deposit?

• If selected and enforceable, it can allow the seller to keep a capped portion of your deposit as damages if you default after removing contingencies.