Making an offer in San Diego? Your earnest money deposit can help you stand out, but it also puts real dollars at risk. If you understand how deposits work here, you can write a stronger offer without giving up smart protections. In this guide, you’ll learn typical deposit amounts, key timelines, when deposits are refundable, and how to structure a competitive but safe offer in San Diego County. Let’s dive in.
What earnest money is
Earnest money is a good-faith deposit you put down when your offer is accepted. It shows the seller you’re serious and is credited toward your purchase price at closing. It also acts as a safeguard for the seller if a buyer defaults after removing protections.
In San Diego, the standard California purchase contract includes fields for your initial deposit, any additional deposits, and the rules for what happens if someone breaches the agreement. Your deposit rights and risks are tied to the contingency deadlines you agree to in the contract.
Who holds your deposit
In California, your deposit is placed in an escrow or trust account managed by an escrow company, title company, or a broker’s trust account. These companies have fiduciary duties for how they handle trust funds. At closing, escrow applies your deposit to your cash-to-close. If the deal cancels, escrow releases funds based on the written contract instructions and applicable procedures.
Typical amounts in San Diego
There is no single number that fits every deal. Local practice in San Diego often looks like this:
- Lower-priced or non-competitive homes: several thousand dollars, often around $3,000 to $10,000.
- Midrange to higher-priced homes: many buyers use a flat-dollar deposit in the $5,000 to $25,000 range.
- Multiple-offer or very hot listings: buyers may offer 3% to 5% of the price, or raise the flat-dollar deposit to stand out.
Actual amounts depend on the neighborhood, price point, number of offers, and the seller’s expectations. In a cooling market, you may not need as much to be competitive. In a hot micro-market, sellers often favor higher deposits or shorter timelines.
When deposits are refundable
Your deposit is usually refundable if you cancel within your contingency periods and follow the contract’s notice rules. Common buyer protections include:
- Inspection contingency: cancel within the inspection window if findings are unacceptable.
- Loan contingency: cancel if you can’t secure lender approval within the deadline.
- Appraisal contingency: cancel if the home does not appraise at value and no agreement is reached.
- Title and HOA review contingencies: cancel for title issues or unacceptable HOA documents within the review period.
- Sale-of-home contingency: cancel if your current home does not sell as required by the contract.
If you remove contingencies and then cancel, you generally risk forfeiting your deposit unless the seller breaches or the contract says otherwise.
Key timelines to watch
- Deposit delivery: due upon acceptance or within a short window, often 1 to 3 business days.
- Inspection period: commonly negotiated in the range of about 7 to 17 days.
- Loan and appraisal deadlines: set by the contract and your lender’s timeline.
Refundability depends on hitting these dates and sending written notices correctly. Keep copies of all notices and escrow receipts.
How escrow releases funds
Escrow companies usually need a mutual written release signed by both buyer and seller to disburse funds if a deal cancels. If there is a dispute, escrow typically holds the deposit until the parties reach agreement or follow the contract’s dispute process. At closing, the deposit is applied to your purchase price and appears on your final statements.
Avoid wire fraud
Always verify wire instructions by calling the escrow company at a trusted phone number you look up, not one you received by email. Confirm names and account numbers before sending any funds. Keep your wire receipt and share confirmation with your agent.
Build a competitive, protected offer
Larger deposits can make you more attractive to sellers, but they increase risk if you later waive protections. Here are common approaches in San Diego:
Conservative and protected
- Modest initial deposit, for example around $5,000.
- Standard inspection and financing contingencies with typical periods.
- Best for slower listings or when you want maximum flexibility.
Balanced and competitive
- Larger deposit, such as $10,000 to $15,000.
- Shorten contingency windows slightly while keeping key protections.
- Pair with a strong preapproval and proof of funds.
Aggressive for hot listings
- Higher deposit, sometimes 3% to 5% of price or a large flat-dollar amount.
- Shorter timelines with limited appraisal or inspection protections.
- Consider appraisal gap coverage only if you understand the risk and have reserves.
San Diego tactics that help
- Escalation clause: increase price up to a cap while keeping realistic contingencies.
- Appraisal gap coverage: commit a set amount if the appraisal comes in low.
- Split deposit: deliver a smaller initial amount fast, then add a second deposit after early inspections to limit exposure.
Smart deposit tips for San Diego buyers
- Align your deposit to the property and competition level. A five-figure deposit is common for million-dollar homes in San Diego County.
- Keep core protections until you are confident about the home, your loan, and the appraisal.
- Send notices on time and in writing. Save receipts, emails, and delivery confirmations.
- Coordinate closely with your lender. Strong preapproval and funds documentation boost credibility.
How we help you win
You do not have to navigate this alone. A high-volume local team can advise you on deposit norms by neighborhood, set realistic timelines, and coordinate escrow so your money is handled correctly. If you need fast financing support, our integrated mortgage partner can help align preapproval speed with your offer strategy so you compete with confidence.
Ready to talk strategy for your next offer in San Diego County? Reach out to Troy Moritz 24/7 Realty for local guidance, fast preapproval coordination, and a clear plan to balance strength with protection.
FAQs
How much earnest money is typical in San Diego?
- Local deposits often range from several thousand dollars up to about 1% to 3% of price, with 3% to 5% or larger flat-dollar amounts in competitive situations.
When is the earnest money due after offer acceptance?
- The contract sets the deadline, but it is commonly due upon acceptance or within 1 to 3 business days so escrow can open.
Can I get my deposit back if I change my mind?
- You can usually recover it only if you cancel within your contingency periods and deliver written notice as the contract requires.
What if my loan is denied after I’m in escrow?
- If you have a valid loan contingency and notify the seller within the deadline, you can typically cancel and recover your deposit.
Who decides when my deposit is released if we cancel?
- Escrow typically needs a mutual written release from both parties, or resolution through the contract’s dispute process, before disbursing funds.
Should I ever waive contingencies to win a bidding war?
- Only if you fully understand the risk and have the reserves to cover issues, since canceling after removing contingencies usually means losing your deposit.
