Earnest Money Explained For 95124 Buyers
January 22, 2026
January 22, 2026
Buying in 95124 and wondering how big your earnest money deposit should be? You want a strong offer that stands out, but you also want to keep your money safe if something changes. You are not alone. Many Cambrian Park buyers ask the same thing. In this guide, you will learn what earnest money is, what local sellers expect, when it is due, and how to protect it with smart contingencies. Let’s dive in.
Earnest money is a good-faith deposit you include with your offer to show the seller you are serious. If the sale closes, the deposit is credited to your down payment and closing costs. It helps the seller feel comfortable taking the home off the market while your escrow moves forward.
In California, the deposit is typically held in an escrow account managed by the escrow company, a title company, or sometimes a broker’s trust account, as directed by your purchase agreement. The agreement also sets the rules for how and when the funds are released.
Nationally, buyers often put down about 1 to 3 percent of the purchase price as earnest money. In the Bay Area, including Cambrian Park, sellers often see larger deposits because competition can be strong. It is common to see 2 to 5 percent, and in multiple-offer situations some buyers go higher.
Since home prices in Santa Clara County are higher than many markets, even a small percentage can be a large number in dollars. The right amount for you depends on your budget, your comfort with risk, and the competition for the specific home. Ask your agent to confirm current norms for the property type and price band you are targeting in 95124.
Most California purchase agreements call for earnest money to be delivered within 24 to 72 hours after the seller accepts your offer. Some sellers request even faster delivery. Plan ahead so you can wire funds quickly to the named escrow holder.
Escrow for a typical home purchase in California often runs 21 to 45 days, though it can be shorter or longer based on your agreement. If you close on schedule, your deposit is applied to your funds at closing. If you cancel within an active contingency period as allowed by your contract, you generally receive your deposit back. If you cancel after removing contingencies or fail to close without a contractual right, the seller may be entitled to keep the deposit under the liquidated damages terms in your contract. If there is a dispute, escrow usually holds funds until both sides agree in writing or a court decides.
Contingencies give you time to investigate the property and your financing without risking your deposit. Each one has a deadline that you negotiate in your offer. Here are the key protections for 95124 buyers:
This lets you hire inspectors and evaluate the home. You can request repairs or credits, or cancel if there are serious issues within the inspection window. Typical time frames range from about 7 to 17 days, though in competitive settings buyers may shorten the timeline. Focus on major systems like the roof, foundation, plumbing, and HVAC, especially in older Cambrian homes.
This protects you if you cannot obtain the loan described in your offer. You set a deadline to secure lender approval. Some buyers shorten this window when they have strong preapproval. Removing it increases your deposit risk if financing falls through.
If the appraised value comes in below the purchase price, this contingency allows you to renegotiate or cancel. In high-demand areas where offers may exceed list price, the appraisal can be a key limiter for your loan.
You can review the preliminary title report, recorded documents, and seller disclosures. If you find a title issue or a material disclosure concern, you can request a resolution or cancel within the contingency period.
If the home is in an HOA, review the bylaws, budgets, reserves, and meeting minutes during your contingency period. Depending on the property, you may also consider pest inspections and, for older homes, evaluations for lead-based paint or asbestos. Ask about any local seismic or soil considerations when relevant.
Use this step-by-step plan to balance strength and safety:
Buyers most often lose deposits when they cancel after removing contingencies or miss performance deadlines in the contract. Failing to close on time without an agreed extension can also put the deposit at risk. Disputes after inspection can trigger a deposit hold in escrow until both parties agree or a court decides.
Protect yourself by staying on top of deadlines, keeping communications in writing, and using experienced local escrow and title professionals. Avoid waiving a key contingency unless you understand the risk and can afford the potential loss.
Cambrian Park’s 95124 is known for its predominantly single-family neighborhoods. Market conditions can shift quickly from balanced to seller-favoring, and multiple offers are not unusual in active seasons. In those periods, sellers often expect larger deposits, tighter timelines, or both.
If you are moving from a less competitive area, plan ahead. Line up preapproval, schedule inspectors early, and choose an earnest money amount that is competitive yet comfortable for you. Lean on local expertise to tailor your deposit and contingency strategy to the specific street and property type.
Your earnest money is a signal of strength and a safeguard for your purchase. In 95124, you can be competitive without taking on unnecessary risk. With the right deposit amount, tight but realistic timelines, and smart contingencies, you can move with confidence.
If you are planning a purchase in Cambrian Park or nearby South Bay neighborhoods, let us guide you through a winning strategy tailored to your goals. For trusted advice and local insight, connect with Tom Yore & Theresa Van Zant.
Success starts with the right partnership. At the Yore | Van Zant Real Estate Group, we deliver personalized service, strategic insight, and results that move you forward.