Buying a home in Redwood City and wondering how much earnest money you need to put down? You are not alone. In our competitive San Mateo County market, your deposit can shape how a seller views your offer and how protected you are if plans change. In this guide, you will learn what earnest money is, typical deposit ranges here, how escrow holds your funds, the deadlines that matter, and how contingencies help protect your deposit. Let’s dive in.
Earnest money basics
Earnest money is a deposit you deliver after your offer is accepted to show you are serious about buying. It becomes part of your purchase funds at closing. While California does not require a deposit by law, sellers in the Bay Area expect one and weigh the amount and terms when comparing offers.
In Redwood City, sellers and listing agents pay close attention to the size of the deposit and your contingency plan. A well-structured deposit signals commitment without exposing you to unnecessary risk.
Typical amounts in Redwood City
In many markets across California, a common earnest money range is 1% to 3% of the purchase price. In more competitive parts of San Mateo County, buyers sometimes offer 3% to 5% or more to stand out, especially when competing with shorter or waived contingencies.
Quick examples
- For a $1,000,000 purchase: 1% is $10,000; 3% is $30,000.
- For a $1,500,000 purchase: 1% is $15,000; 3% is $45,000.
Your situation may differ. All-cash offers, new construction, or offers with fewer contingencies sometimes include higher deposits. If you are keeping multiple contingencies or are tight on cash, a smaller deposit can still work when paired with strong overall terms.
Where your deposit goes
In California, your earnest money is typically deposited with the escrow or title company named in the purchase agreement. These companies hold client funds in regulated trust or escrow accounts that are separate from their operating funds.
You will usually deliver the deposit within 24-72 hours after acceptance, though your contract sets the exact deadline. At closing, the deposit is applied to your down payment or closing costs. If you cancel within allowed contingencies, escrow typically returns the deposit based on the contract. If you breach the contract, the seller may try to keep the deposit if the agreement allows.
Wire and escrow safety
- Confirm the escrow or title company named in your contract before sending any funds.
- Call the company using a trusted phone number to verify wiring instructions.
- Never send money to a personal account or act on last-minute wire changes without direct confirmation.
- Get a written receipt when escrow receives your funds.
Deadlines that matter
Your purchase agreement sets clear dates for your deposit and for contingency removal. These dates are taken seriously. Missing a deadline can put your deposit at risk if you later default.
Common contingencies
- Inspection contingency to review the property and negotiate or cancel within a set period.
- Loan contingency to protect you if your lender cannot approve financing by the deadline.
- Appraisal contingency to address a low appraisal result.
- Title and disclosures review to address issues found in reports and seller disclosures.
- Sale of your current home, which is less common in competitive situations.
How contingencies protect you
If you cancel within a valid contingency period, the contract generally instructs escrow to return your deposit. If you miss a date or remove a contingency and later cancel without protection, you may lose the right to a refund. Shortening or waiving contingencies can strengthen your offer, but it increases your exposure.
Competitive-offer strategies
Sellers often prefer larger deposits, shorter timelines, and strong financing or cash. As a buyer, you can compete while managing risk.
- Increase your deposit but keep essential contingencies. Confirm in writing when and how the deposit becomes non-refundable.
- Use a larger deposit that remains refundable during contingency periods. Calendar all removal dates.
- Include an escalation clause up to a cap, paired with reasonable contingencies.
- Provide a strong lender pre-approval or proof of funds to support your deposit and down payment.
Tradeoffs to weigh
- Waiving inspection, loan, or appraisal can win attention but exposes you to unknown repairs or financing risk.
- A very large deposit can make your offer stand out, but it increases potential loss if you fail to perform.
- Sellers may value certainty of close and timing as much as deposit size, so balance all terms.
Redwood City buyer checklist
Before you submit your offer, confirm these items with your agent:
- What is the customary deposit size for similar homes in Redwood City right now?
- Who will hold the earnest money and how will you deliver it?
- What are the exact deadlines for your initial deposit and contingency removal?
Before wiring funds:
- Verify wiring instructions directly with the escrow or title company using a trusted phone number.
- Get escrow contact details and a deposit receipt.
Contingency planning:
- Decide which contingencies you will keep and where you can shorten timelines.
- Schedule inspections and lender steps early to stay ahead of deadlines.
Documentation:
- Keep written proof of your deposit and any escrow receipts.
- Ask escrow to confirm when your funds clear.
If you plan a larger deposit:
- Ask how much could be forfeited if you breach.
- Confirm whether the contract includes a liquidated damages clause and how it interacts with your deposit.
Common pitfalls to avoid
- Wiring funds to the wrong place or acting on unverified instructions.
- Missing contingency deadlines or removing them without a clear plan.
- Assuming a bigger deposit guarantees acceptance.
- Making a very large deposit without understanding refund triggers and remedies.
- Failing to calendar key dates or get written confirmations from escrow.
How Real Smart Group helps you win
You get a team that lives the Redwood City market every day. We help you right-size your deposit for the property, set clear timelines, and structure contingencies that protect your cash while keeping your offer competitive. Our transaction managers track every milestone, and our escrow protocols reduce wire risk.
Because we also represent builders and maintain RS Exclusive early-access opportunities, we can sometimes reduce head-to-head competition. That can let you keep essential protections and still put forward a compelling offer. We bring the local comps, process discipline, and market read you need to move with confidence.
Ready to talk strategy for your next Redwood City offer? Connect with the Real Smart Group to map your plan from deposit to close.
FAQs
What is earnest money in Redwood City home purchases?
- It is a buyer deposit delivered after offer acceptance to show commitment and later applied to your purchase funds at closing.
How much earnest money do Redwood City buyers usually put down?
- Many offers land around 1% to 3% of price, while competitive situations can see 3% to 5% or more depending on terms and contingencies.
Who holds my earnest money during escrow in San Mateo County?
- The escrow or title company named in your contract typically holds it in a regulated trust or escrow account.
When is my deposit due after my offer is accepted?
- Your contract sets the deadline. A common window is 24-72 hours, so plan to wire or deliver funds quickly.
How do contingencies protect my earnest money?
- If you cancel within valid inspection, loan, appraisal, or other contractual contingencies, escrow typically returns your deposit per the agreement.
Can a seller keep my deposit if I cancel the deal?
- If you cancel outside your contingencies or breach the contract, the seller may try to keep the deposit if allowed. Outcomes depend on contract terms and facts.
How do I avoid wire fraud when sending my deposit?
- Confirm wiring instructions by calling the escrow or title company using a trusted number, and never act on unsolicited changes without direct verification.
