Buying in Murrieta and wondering how much earnest money you need to put down? You are not alone. The deposit can feel confusing, especially if you are a first-time or relocating buyer. In a few minutes, you will understand typical deposit amounts, how escrow holds your funds, when your money is refundable, and how to protect yourself from wire fraud. Let’s dive in.
Earnest money basics in California
Earnest money, also called an earnest money deposit, is your good-faith deposit that shows a seller you are serious. It becomes part of your purchase funds at closing or can be used to cover seller damages if you default under the contract. In California, the deposit is controlled by the purchase contract and escrow instructions, often the California Association of Realtors Residential Purchase Agreement. You can review consumer guidance and contract concepts through the California Association of Realtors and the California Department of Real Estate.
Typical deposit amounts in Murrieta
There is no fixed amount by law. In many Murrieta offers, a common range is 1% to 3% of the purchase price. On lower-priced homes, some buyers use a smaller flat amount, such as $2,500 to $5,000. In multiple-offer situations, buyers sometimes offer higher deposits, such as 3% to 5%, to strengthen the offer.
Quick examples
- $500,000 home: 1% is $5,000, 3% is $15,000.
- $700,000 home: 1% is $7,000, 3% is $21,000.
- $900,000 home: 1% is $9,000, 3% is $27,000.
Local factors can nudge the deposit higher or lower. Price point, how competitive a neighborhood is, and whether you are offering cash or shortening contingencies can all influence the number.
How escrow holds your deposit
In California, your deposit is typically placed with a neutral escrow or title company named in the contract. The funds are held in a trust or escrow account and remain there until closing or until both parties give written instructions for release. Riverside County records and local processes are handled through county offices, which you can learn about on the Riverside County site.
Timing and delivery
Most contracts require you to deliver the deposit within a specific window, often 24 to 72 hours after acceptance, unless the agreement states otherwise. You can usually pay by cashier’s check or wire transfer, and sometimes by personal check. Wire transfers are common for larger deposits.
Safeguards and receipts
Wire fraud is a real risk in real estate. Always verify wire instructions by phone using a number you look up independently for the escrow company. The Consumer Financial Protection Bureau and the FBI offer guidance on avoiding wire fraud. After you send funds, get a written receipt from escrow that shows the amount received and how funds will be credited at closing.
When your deposit is refundable
Refundability depends on contingencies and timing in your contract. If you cancel for a permitted reason within your contingency period and follow the procedure in the agreement, you usually receive your earnest money back. If you cancel after removing contingencies, you may forfeit the deposit.
Common contingencies
- Inspection contingency. You can cancel within the inspection period if results are unsatisfactory.
- Loan or financing contingency. If your lender denies financing within the loan contingency period and you cancel properly, your deposit is usually refunded.
- Appraisal contingency. If the property appraises below the contract price and you do not proceed, a refund can apply if this contingency is in place.
- Title contingency. If title issues cannot be cured, you can cancel and be refunded.
- HOA or disclosure review. If documents reveal issues and you cancel within the period, you may receive a refund.
- Sale-of-home contingency. If your existing home does not sell within the agreed time, you can cancel under this contingency.
Typical windows are negotiated, but inspection periods often run 7 to 17 days and loan contingencies commonly run 17 to 21 days. Always check your actual contract for dates.
What can void a refund
- You waive a contingency or allow it to expire without canceling.
- You breach the contract, such as failing to deliver the deposit on time or not removing contingencies when required.
- A dispute arises and the parties do not provide matching instructions to escrow. In that case, escrow holds funds until there are mutual instructions or a final order. Many contracts encourage mediation or arbitration if needed, which you can learn more about through the California Department of Real Estate.
Real-world examples
- Inspection-based refund. You have a 10-day inspection period. On day 7, you find major foundation issues, notify the seller within the period, and cancel under the inspection contingency. Result: deposit refunded.
- Appraisal shortfall with loan contingency. The home appraises $30,000 under contract price. You cannot cover the gap, cancel within the loan contingency period, and provide lender documentation. Result: deposit refunded.
- Contingencies removed, then cold feet. You remove inspection and loan contingencies, then decide not to proceed for personal reasons. Result: deposit is likely forfeited to the seller under the contract.
Smart safety steps for buyers
- Confirm escrow details early. Know which escrow or title company will hold your deposit and save their main phone line.
- Verify wire instructions by phone before sending money. Use a number you find independently, never one only in an email. Review tips from the Consumer Financial Protection Bureau and the FBI on avoiding wire fraud.
- Track your deadlines. Set calendar alerts for deposit due date and all contingency removal dates.
- Keep documentation. Save inspection reports, lender letters, and any notices you send or receive, in case a refund question comes up.
Buyer checklist for Murrieta
- Pre-approval letter: yes/no
- Deposit amount decided (dollars or percent): _______
- Escrow or title company named: _______
- Deposit delivery method (check or wire): _______
- Deposit due date in contract: _______
- Inspection window closes: _______
- Loan contingency deadline: _______
- Appraisal contingency deadline: _______
- Received escrow receipt: yes/no
- Wire instructions verified by phone: yes/no
Murrieta vs. Temecula strategy notes
Murrieta and Temecula share many norms, yet micro-market dynamics can differ. Newer tracts or areas with strong demand often see more competitive terms and higher deposits. In many Murrieta offers, a strong pre-approval and a customary 1% to 3% deposit is competitive. In multiple-offer situations, you might raise the deposit or shorten contingency periods, but weigh the risk carefully before giving up protections.
When to get advice
Your contract controls the rules for your deposit, contingencies, and deadlines. If you are considering waiving contingencies, if a large deposit is at stake, or if a dispute emerges, talk with your agent and consider independent legal counsel. For general consumer education on real estate transactions in California, visit the California Department of Real Estate and the California Association of Realtors.
Ready to move forward?
You deserve a calm, informed purchase experience with clear guidance on deposits, escrow, and contingencies. If you want local strategy tailored to Murrieta and the greater Temecula Valley, connect with the team at Meeker Realty Group. We will help you choose a smart deposit amount, protect your timelines, and move confidently to closing.
FAQs
What is earnest money in a California home purchase?
- It is your good-faith deposit that shows commitment, held in escrow and credited to your purchase at closing under your contract and escrow instructions.
How much earnest money do Murrieta sellers usually expect?
- Many offers use about 1% to 3% of the purchase price, with higher deposits in multiple-offer situations and smaller flat amounts on some lower-priced homes.
When do you pay the earnest money deposit in Murrieta?
- Most contracts require delivery within 24 to 72 hours after offer acceptance, unless your agreement sets a different deadline.
Can you get your deposit back if financing falls through?
- Yes, if you have a loan contingency and cancel within that period with proper documentation and notice as your contract requires.
Who holds the earnest money during escrow in Riverside County?
- A neutral escrow or title company named in the contract typically holds the funds in a trust or escrow account until closing or written instructions for release.
How can you avoid wire fraud when sending your deposit?
- Verify wire instructions by calling the escrow company at a phone number you find independently, and review tips from the CFPB and FBI before sending funds.
