Thinking about making an offer in Sunnyvale and wondering how much earnest money you should put down? You are not alone. In a competitive Silicon Valley market, deposit size, timing, and contingency choices can shape whether your offer wins and how protected your money is. In this guide, you’ll learn how earnest money deposits work in Sunnyvale and Santa Clara County, when they’re refundable, and how to write a strong offer without taking on unnecessary risk. Let’s dive in.
What earnest money is
An earnest money deposit is a good‑faith payment you make to show the seller you are serious. In Sunnyvale, it helps the seller take the property off the market while you work through inspections, loan approval, and appraisal. At closing, your deposit is applied to your down payment or closing costs. If the deal falls through for reasons allowed in the contract, you can typically recover the deposit.
How deposits work in Sunnyvale
California purchase agreements spell out the deposit amount, who holds it, and what happens if either side defaults. In Santa Clara County, escrow or title companies commonly hold the funds in a trust account. You should receive a receipt confirming the amount and the escrow account details. The settlement statement at closing will show your deposit credit.
Who holds the funds
- The escrow or title company named in the purchase agreement usually holds the deposit.
- In some cases, the seller’s broker trust account may be used if both sides agree.
- Escrow will only release funds per the contract and written instructions from both parties or a court order.
Deposit timing
- Most contracts require the initial deposit within a short window after acceptance, often within 2–3 business days unless another date is negotiated.
- Some contracts include a second deposit that is due later, such as after you remove contingencies or by a specific day.
How deposits apply at closing
- Your earnest money is credited toward your down payment and/or closing costs.
- The credit appears on your final closing statement from escrow or title.
When your deposit is refundable
Your contract’s contingencies control refundability. If you cancel properly within an active contingency period, your deposit is typically refundable.
Common refundable scenarios
- Inspection contingency: You cancel within the inspection window and follow the notice procedure in the contract.
- Loan contingency: Your loan is not approved within the loan contingency period and you cancel per the contract.
- Appraisal contingency: The appraisal comes in below the price and you terminate under the appraisal terms.
- Title contingency: Title issues cannot be cleared and your contract allows termination.
- Sale‑of‑home contingency: Your contract includes this contingency and your sale does not close in time.
When it becomes non‑refundable
- When you remove contingencies in writing, your deposit generally moves toward non‑refundable status, except if the seller defaults.
- If you miss a contingency deadline and later default, the seller may claim your deposit as liquidated damages or seek other remedies as set in the contract.
Local norms in Santa Clara County
Sunnyvale is a high‑demand market, and deposit practices reflect that. While nationwide norms often fall around 1–3% of the purchase price, many Sunnyvale buyers lean toward the higher end of that range. In multiple‑offer situations, sellers may prefer larger deposits or staged deposits that grow after key milestones.
Typical timelines and structures
- Initial deposit: Due within 2–3 business days of acceptance in many agreements.
- Inspection contingency: Commonly 7–17 days; buyers sometimes shorten this window to compete.
- Loan contingency: Often 17–21 days; some buyers shorten with lender coordination.
- Appraisal: Typically aligned with loan timelines; buyers may use capped appraisal‑gap language rather than waiving protections.
- Additional deposit: A second deposit may be due upon contingency removal or by a set date.
Strengthen your offer, limit risk
You can be competitive without exposing your deposit more than necessary. Aim for clarity in your contract and realistic timelines that match your lender’s pace.
Smart strategies
- Strong deposit with stages: Offer a meaningful initial deposit and schedule a second deposit after clearing key contingencies. This shows commitment while protecting your position early.
- Shorten, do not waive: Reduce inspection or loan periods to signal confidence, but keep the contingencies in place for a limited time.
- Full pre‑approval: Provide a complete pre‑approval and proof of funds for your deposit. This boosts credibility without changing your deposit’s protections.
- Capped appraisal gap: Instead of waiving appraisal, agree to cover a specific dollar gap up to a cap if the valuation is low. Coordinate with your lender and agent.
- Escalation language: If allowed, use a clear cap and keep your contingency framework consistent so the deposit terms stay transparent.
- Flexible terms: Offer a closing schedule or rent‑back that works for the seller. This can help you win without extra deposit risk.
High‑risk moves to avoid
- Waiving loan or inspection contingencies: You could lose your deposit if a problem arises.
- Declaring the deposit “non‑refundable”: This removes typical protections and should be used only with great caution.
- Relying on verbal promises: Only written contract terms and escrow instructions will control your deposit.
Safe payment and documents
Protect your funds and keep clean records from day one. A little diligence goes a long way.
What to keep
- A signed copy of your purchase agreement with all deadlines.
- The escrow receipt showing the deposit amount, date, and escrow account.
- Written confirmation of any additional deposit schedule and contingency removal dates.
- Your pre‑approval and proof of funds that supported your offer.
Delivering funds safely
- Follow the escrow company’s wiring instructions exactly.
- Confirm wiring details by calling the escrow office using a known phone number, not an email link.
- A wire or cashier’s check to the named escrow or title company is standard. Request a receipt.
Red flags to watch
A few warning signs can hint at avoidable risk or potential disputes.
- No clear release instructions for the deposit in escrow paperwork.
- Conflicting guidance between buyer, seller, and escrow on deadlines or releases.
- Requests to send funds to an account not listed in the escrow instructions.
- Verbal side agreements that do not match the signed contract.
The bottom line
In Sunnyvale, the size and security of your earnest money deposit are shaped by your contract timelines and contingency choices. A larger or staged deposit, shorter but realistic contingency periods, and tight coordination with your lender can help you compete while keeping reasonable protections in place. If you want a strategy tailored to your price point and neighborhood, let’s talk about current norms and how to structure terms that align with your comfort level.
Ready to craft a competitive, low‑risk offer in Sunnyvale? Connect with Rabeet Noor for local guidance, smart negotiation, and a clear plan from offer to close.
FAQs
How much earnest money is typical in Sunnyvale?
- Nationwide norms are often 1–3% of price; in Sunnyvale’s competitive market, many buyers offer at the higher end or use staged deposits based on milestones.
When is my deposit due after offer acceptance?
- Many contracts require the initial deposit within 2–3 business days of acceptance, unless you negotiate a different deadline in writing.
When is my Sunnyvale deposit refundable?
- Your deposit is usually refundable if you cancel within active contingencies, such as inspection, loan, appraisal, title, or a sale‑of‑home contingency, and follow the contract’s notice steps.
What makes my deposit non‑refundable?
- After you remove contingencies in writing, the deposit generally becomes non‑refundable except for seller default; missing a contingency deadline can also put your deposit at risk.
Should I waive contingencies to win in Sunnyvale?
- Waiving key protections is risky; consider shortening timelines, staging deposits, and using capped appraisal‑gap language to stay competitive with less exposure.
How do I prevent wire fraud when sending my deposit?
- Verify wiring instructions by phone using a known number for escrow, avoid clicking email‑based links for account details, and confirm receipt immediately after sending funds.
