Earnest Money Strategy: How Much Should You Actually Put Down?

You found the home. You’re ready to make an offer. Then the agent asks: how much earnest money are you putting down? One percent? Three percent? Five? Whatever you decide goes into escrow within days of signing — and how you handle this single number can be the difference between a winning offer and a losing one, and between getting your deposit back and forfeiting it.

In Episode 21 of The Property Professor, Dr. Kevin Shufford walks through what earnest money actually is, what’s standard in Greater Phoenix, Scottsdale, Murrieta, Temecula, and San Diego County, when you should go higher to win a competitive offer, and — most importantly — the contingency framework that protects your deposit if the deal falls through for reasons that aren’t your fault.

What you’ll learn in this episode

• What earnest money is — and why it’s separate from your down payment
• Standard earnest money amounts (1–3% of purchase price) vs. competitive offer ranges (3–5%+)
• How earnest money signals seriousness to sellers in tight markets like Scottsdale and North County San Diego
• The three contingencies that protect your deposit: inspection, appraisal, and financing
• When earnest money becomes non-refundable — and the deadlines that matter
• Specific local context for Arizona AAR contracts vs. California CAR contracts

Related episodes referenced

• Episode 3 — Pre-Approval vs. Pre-Qualification (why your lender letter matters when you’re writing offers)
• Episode 5 — Closing Costs Decoded (earnest money credits at closing)
• Episode 8 — The Appraisal Gap (when offering more earnest money is part of a competitive strategy)
• Episode 13 — Where Earnest Money Funds Can Come From (gift funds, savings, and sourcing rules)

Heads up — any specific percentages, dollar amounts, or earnest money examples in this episode are illustrative only. Standard practice shifts with market conditions, and your specific situation depends on the contract you’re using, the local market, and the seller’s expectations on your offer. Talk to your agent for what’s competitive in your specific neighborhood today.

Want help structuring your offer?

If you’re getting ready to write an offer in Greater Phoenix, Scottsdale, Murrieta, Temecula, or San Diego County and want a second set of eyes on your earnest money amount and contingency timelines, book a call. I’ll walk you through what’s working in your specific submarket right now.

Dr. Kevin Shufford is a licensed real estate agent and mortgage loan originator. This episode is educational and not financial, tax, or legal advice for your specific situation.