Putting money on the line before you own the home can feel risky. In Tigard, earnest money is a normal part of making an offer, yet the rules can seem confusing when you are moving fast. You want to stand out without gambling your savings. In this guide, you will learn what earnest money is, how much buyers in Tigard typically deposit, when it is refundable, and how to write a competitive offer while protecting yourself. Let’s dive in.
What earnest money is
Earnest money is a good faith deposit that shows a seller you are serious about buying. If the sale closes, the deposit is credited toward your down payment or closing costs. If the deal ends, the purchase contract decides whether your deposit is refunded or released to the seller.
Purpose in Tigard sales
- Signals that you intend to complete the purchase.
- Adds financial consequences if a buyer walks away without a valid reason under the contract.
- Helps your offer stand out in multiple-offer situations.
Who holds the deposit
In Oregon, the deposit is typically held in escrow by a title company, an escrow company, or sometimes a brokerage trust account. The purchase agreement names the holder and explains how funds are handled.
When you pay it
You usually deliver earnest money with your offer or shortly after mutual acceptance. Exact timing comes from the purchase agreement you sign.
Typical amounts in Tigard
Local custom across the Portland metro, including Tigard, follows two common approaches:
- A flat amount, often $1,000 to $5,000 on many listings, especially at lower to mid price points.
- A percentage of the price, usually about 1 to 3 percent. Buyers lean higher in hot markets to strengthen their offer.
What changes the size
- Market conditions. In a buyer’s market, sellers may accept lower deposits. In a seller’s market, larger deposits are more common.
- Price point. Lower-priced homes may use a flat amount that equals a higher percentage. Higher-priced homes often use 1 to 2 percent or more.
- Risk tolerance. If a property may need repairs, you might keep the deposit modest and rely on your inspection contingency.
Simple examples
- A $500,000 home with a 1 percent deposit equals $5,000. At 3 percent, it is $15,000.
- A $750,000 home at 2 percent equals $15,000.
There is no one right number. The goal is to show commitment while keeping risk in check.
When your deposit is refundable
Earnest money is refundable if you follow the contract and use your contingency rights within the deadlines. The key is giving proper written notice on time.
Common refundable situations
- Inspection contingency. If you terminate within the inspection period per the contract, you usually get a refund.
- Financing contingency. If you cannot obtain your loan by the deadline and cancel correctly, your deposit is typically returned.
- Appraisal contingency. If the appraisal is low and you terminate within the terms, you may get a refund.
- Title or HOA review. If significant title or HOA issues appear and you end the deal per the contract, a refund is common.
- Sale-of-home contingency. If your current home does not sell in time and you cancel properly, your deposit is usually returned.
When sellers may keep it
- You miss a deadline or fail to deliver required notices.
- You default without an applicable contingency.
- You waived protections like inspections or appraisal, then try to cancel without contract support.
Many Oregon purchase agreements include dispute-resolution and liquidated damages clauses. If a dispute arises, escrow generally holds funds until both parties agree or a legal decision is made.
Key contingencies explained
Inspection contingency
- Typical timeframe in the Portland area is about 7 to 14 days after acceptance.
- Use this period to complete general and specialty inspections, such as a sewer scope or mold inspection, then request repairs or cancel.
- Shorter timelines can be more attractive to sellers, but only shorten if you can complete inspections quickly.
Financing contingency
- Protects you if your mortgage is not approved.
- Contracts often set application and documentation deadlines and a financing contingency date.
- Strong pre-approval helps sellers view your financing as solid.
Appraisal contingency
- Protects you if the appraised value is below the purchase price.
- If there is a shortfall, you can try to renegotiate price, bring extra funds, or cancel per the contract timeline.
Title and HOA document review
- Allows time to review the preliminary title report and HOA documents.
- If you find significant issues and act within deadlines, you can usually terminate and receive a refund.
Sale-of-home contingency
- Makes your purchase dependent on selling your current home.
- In multiple-offer scenarios, sellers may prefer offers without this contingency.
About waiving contingencies
Waiving inspections or appraisal can make an offer stronger, yet it raises your risk of losing the deposit or closing on a home with costly issues. A safer approach is to shorten timelines or limit, rather than waive, protections.
Competitive offers without extra risk
You can write a compelling offer in Tigard without giving up key protections.
Strengthen your offer terms
- Provide a strong pre-approval and proof of funds for the deposit.
- Shorten contingency timelines where feasible, especially for inspections.
- Align closing date and possession with the seller’s needs.
Use deposit strategy
- Consider increasing the deposit closer to 2 to 3 percent in competitive situations.
- Ask about a two-step deposit structure. This means a smaller amount at acceptance and a larger second deposit within 24 to 72 hours if allowed by the contract. It shows commitment while giving you time to move funds.
Escalation and appraisal gap tools
- An escalation clause can keep you competitive without bidding too high at the start.
- If you are comfortable, an appraisal gap clause can cover a specific shortfall amount instead of waiving the appraisal contingency outright.
Handling your deposit safely
Delivery methods
Common ways to deliver earnest money include a wire transfer to escrow, a certified check, or a personal check delivered to the escrow or title company. Always follow the contract and escrow instructions.
Avoid wire fraud
- Confirm wiring instructions by phone using a verified number, not an email link.
- Verify the company name, account details, and contact information before sending funds.
- Be cautious with last-minute changes to instructions.
Keep records
Request a written receipt showing the amount, date, and the escrow agent’s contact details. Save inspection reports, lender updates, and all notices you send.
Your earnest money timeline
Use this simple checklist to stay on track:
- Before writing: Get a strong pre-approval. Decide your deposit range and make sure funds are accessible.
- Offer day: Include your proposed earnest money amount and any two-step structure.
- Upon acceptance: Deliver the deposit as required and obtain a receipt.
- Days 1 to 2: Schedule inspections and any specialty checks you want.
- Days 7 to 14: Complete inspections and submit repair requests or a termination notice within the deadline.
- By financing and appraisal dates: Monitor lender milestones and respond quickly if value or qualification concerns arise.
- Pre-closing: Confirm your deposit is credited on your settlement statement.
If a dispute arises
If buyer and seller disagree about who gets the deposit, escrow usually holds funds until there is a written mutual release or a resolution under the contract’s dispute process. Keep your notices and documentation organized. Meeting deadlines and following the contract’s steps gives you the best chance of a timely refund when you are entitled to one.
Bottom line for Tigard buyers
Earnest money helps your offer stand out in Tigard, yet it does not have to put your savings at risk. Focus on a deposit size that matches the market and your comfort level, protect yourself with key contingencies, and follow every deadline in writing. With a thoughtful plan, you can be competitive and confident from offer to closing.
If you want help calibrating deposit size and timelines for your specific price range and neighborhood, reach out to Ty Lankheet for a local, step-by-step strategy.
FAQs
How much earnest money should I put down in Tigard?
- Many buyers use $1,000 to $5,000 or about 1 to 3 percent of the price, adjusting for market heat, price point, and comfort with risk.
Is my earnest money refundable if inspections find issues?
- Yes, if you act within the inspection period and give proper written notice per the contract’s rules.
What if my loan is denied after pre-approval?
- With a valid financing contingency and timely notice, you can typically cancel and receive a refund.
How quickly do I need to deliver the deposit?
- Usually with the offer or shortly after mutual acceptance, according to your Oregon purchase agreement.
Where is my earnest money held in Tigard transactions?
- Typically by a title or escrow company, or sometimes a brokerage trust account named in the contract.
How do I avoid wire fraud when sending earnest money?
- Call the escrow company using a verified phone number to confirm wiring details, and be wary of email changes to instructions.
