Writing an offer on a Fremont home and wondering how the earnest money works? You are not alone. Your earnest money deposit shows the seller you are serious, and it can also be at risk if timelines slip or terms are not followed. In this guide, you will learn how much buyers in Fremont typically put down, when it is due, how contingencies protect you, and how to keep your funds safe from wire fraud. Let’s dive in.
What earnest money is in California
Earnest money is a good faith deposit you provide when your purchase offer is accepted. It is not an extra fee. At closing, it is credited toward your purchase price or closing costs. If the sale does not close, what happens to your deposit depends on the contract.
In California, your deposit usually goes to the escrow holder named in the contract. Escrow companies follow state rules and issue written receipts when they receive funds. Your rights are governed by the purchase agreement and escrow instructions. The language in those documents controls when the money is refundable and when a seller may claim it as liquidated damages.
Typical deposit amounts in Fremont
Fremont sits in a high-cost East Bay market, so deposits are often expressed as a percentage and as a dollar amount. In a balanced market, buyers commonly see deposits in the 1 to 3 percent range. In more competitive situations that are common in parts of the Bay Area, 3 to 5 percent or higher is not unusual.
Your exact amount depends on price point, competition, whether your offer is all cash or financed, and whether you are shortening or waiving contingencies. Ask your agent about current norms for your Fremont neighborhood and price tier since market conditions change quickly.
Timelines and contingencies that protect you
The California Association of Realtors Residential Purchase Agreement sets standard timelines that many East Bay agents use as a starting point. The deposit is often due within three business days of acceptance unless you negotiate a different period. You can review the structure in the California Association of Realtors Residential Purchase Agreement.
Common contingency periods include:
- Inspection period: often 7 to 17 days, sometimes around 10 days to start
- Loan contingency: often 17 to 21 days, depending on lender speed
- Appraisal contingency: usually tied to the loan timeline
- Title, escrow, and disclosure review periods: as specified in the contract
Contingencies give you time to investigate and secure financing. You either remove them in writing by the deadline or cancel within the contingency period. Your right to a refund of your deposit depends on meeting those dates and the exact language in your agreement.
When you can get your deposit back
If you cancel during a valid contingency period, you are generally entitled to a full refund of your earnest money. Common reasons include an unsatisfactory inspection, a loan denial within the contingency window, or an appraisal that does not meet lender requirements when you have an appraisal contingency.
If you cancel after removing contingencies, or you breach the contract, the seller may have the right to keep the deposit as liquidated damages. Many California contracts include a liquidated damages clause. Always confirm what your signed agreement says about deposit forfeiture before you remove contingencies.
How appraisal shortfalls are handled
If an appraisal comes in below the purchase price, the parties often negotiate. Your contract may allow you to cancel during the appraisal contingency or to proceed if you can cover a gap. If you cannot reach agreement and the deal is terminated, the deposit outcome depends on who cancels and the contingency terms in the contract.
What happens in a deposit dispute
Most earnest money questions are resolved by discussion between the parties, their brokers, and escrow. If the buyer and seller give conflicting instructions, escrow generally holds the funds until there is a mutual written release or a court order, consistent with standard California practices. The contract often calls for mediation before litigation. Keep all communications in writing and follow the notice procedures in your agreement.
Wiring and escrow safety in the East Bay
Wire fraud is a real risk in real estate. Criminals spoof emails and send fake wiring instructions that look legitimate. To protect your deposit:
- Do not rely on email alone for wiring instructions. Call a verified phone number for the escrow company to confirm account details.
- Find the phone number independently, not from the email with the instructions.
- Ask your escrow officer to read back the bank name and full account number before you send funds.
- Request a written receipt immediately after the transfer.
- Consider using a cashier’s check delivered directly to escrow if acceptable.
- Keep copies of all confirmations and receipts.
Learn more from the FBI’s Internet Crime Complaint Center and review NAR’s wire fraud guidance. If you suspect fraud, contact your bank and escrow company at once and file a report with IC3.
You can also verify that your escrow company is properly licensed. Use the state resource to verify a licensed escrow company through the California DFPI.
Documentation your lender will want
Lenders usually require proof that your deposit funds are seasoned and not borrowed, or that any gift funds are properly documented. Keep these items handy:
- Escrow receipt showing the deposit amount, date, and who sent the funds
- Bank transfer confirmation or cashier’s check copy
- Recent bank statements showing the source of funds
- Fully executed purchase agreement and contingency timelines
For a plain-language refresher, see the CFPB’s explanation of earnest money.
Strategy: choose the right deposit amount
Your earnest money is a signal of strength and a source of risk. Match your amount to your comfort level and the market setting in Fremont.
- If multiple offers are likely, a higher deposit can help, especially when paired with clean terms and organized documentation.
- If you value flexibility, consider a more modest deposit and use other levers, such as a shorter escrow, strong preapproval, and a closing schedule that fits the seller.
- Avoid overcommitting. A small percentage on a high-priced Fremont home can still be a large dollar amount. Decide what you can reasonably have at risk.
You can also balance risk by keeping standard contingency periods where needed while making your offer attractive in other ways.
Step-by-step: making your deposit in Fremont
- Confirm the exact deposit amount and due date in your signed contract.
- Verify the escrow holder’s name, address, and phone number independently.
- Decide on wire or cashier’s check based on escrow’s instructions and your bank’s limits.
- If wiring, confirm instructions by phone with a known-good number and request a receipt after transfer.
- Calendar your contingency deadlines and inspection appointments immediately.
- Save all receipts and confirmations for your lender and your records.
Quick checklist for Fremont buyers
- Verify the escrow company’s identity and licensing through the state’s DFPI site.
- Confirm the deposit amount, holder, and delivery method in your contract.
- Deliver funds by the contract deadline, often within three business days of acceptance.
- Track inspection, loan, appraisal, title, and disclosure deadlines in writing.
- Keep documentation for lender underwriting and for your own protection.
- If you cancel under a contingency, follow the contract’s written notice process and keep copies.
Helpful explainers and references
- Review the structure of the California Association of Realtors Residential Purchase Agreement for timelines and deposit clauses.
- Understand the basics with the CFPB’s explanation of earnest money.
- Read a plain-English legal overview at Nolo’s overview of earnest money deposits.
- Protect your transfer with NAR’s wire fraud guidance and report issues at the FBI’s Internet Crime Complaint Center.
- Verify escrow licensing via the California DFPI.
If you want local, practical guidance on structuring your deposit, timing your contingencies, and avoiding pitfalls in Fremont, reach out for a friendly conversation. When you are ready to talk through your options, connect with Unknown Company and get clear next steps.
FAQs
What is earnest money on a Fremont home purchase?
- It is a good faith deposit credited to your price at closing, held by escrow, and governed by your contract’s terms and timelines in California.
How much earnest money should I put down in Fremont?
- Many buyers see 1 to 3 percent in balanced markets and 3 to 5 percent or more when competition is strong, but your amount should match current local norms and your comfort level.
When is earnest money due in California contracts?
- The purchase agreement controls; common practice using CAR forms is delivery within three business days of acceptance unless you negotiate otherwise.
Can I get my earnest money back after an inspection or loan issue?
- If you cancel properly within an inspection, loan, or appraisal contingency, you are generally entitled to a refund under the contract.
Who holds the earnest money in the East Bay?
- Usually the named escrow company, or at times the seller’s broker trust account, as specified in your signed agreement and escrow instructions.
How do I avoid wire fraud when sending my deposit?
- Confirm wiring details by phone using a verified number, never from an email link, and request a written receipt; see NAR and the FBI’s IC3 for guidance.
What happens if the appraisal comes in low in Fremont?
- You may renegotiate or use your appraisal contingency; if the deal ends, the deposit outcome depends on who cancels and the contract’s terms on contingencies and liquidated damages.
