Are you getting ready to make an offer in Mill Valley or San Rafael and wondering how much earnest money you should put down? You are not alone. In a competitive Marin market, the deposit you choose can strengthen your offer and also affect your risk. In this guide, you will learn typical ranges, when deposits are due, how escrow holds the funds, what puts money at risk, and smart ways to protect yourself. Let’s dive in.
Earnest money basics
Earnest money is a deposit that shows a seller you are serious about buying. You agree to place funds with a neutral escrow or title company, and the money stays there until closing or cancellation. If the sale closes, your deposit is credited to your purchase. If you cancel under a valid contingency, the deposit is typically returned according to the contract.
In Marin, strong buyer demand and low inventory in many segments often create multiple-offer situations. That environment encourages buyers to use meaningful deposits and clean, well-timed offers.
How much to offer in Marin
There is no single correct number. Local norms range from flat amounts to percentages of price, and the best choice depends on the property and competition.
Typical ranges
- Flat deposits: common for lower price tiers, often around 5,000 to 25,000 dollars.
- Percentage deposits: many buyers use 1 to 3 percent of the price, which can be higher in competitive Bay Area segments.
- Large-dollar deposits: for multi-million-dollar homes, even a 1 to 2 percent deposit can be a substantial sum, and some buyers choose to go higher to stand out.
What drives variation
- Price point. Higher prices usually mean higher deposits by dollar amount.
- Competition level. More offers often push buyers to increase deposits or shorten contingencies.
- Financing vs. cash. Cash buyers are often expected to provide stronger, faster deposits. Financed buyers can still compete by increasing deposit size and delivering funds promptly.
- Contingency plan. If you shorten or waive contingencies, a stronger deposit can reassure a seller, but it also increases your exposure if you later want to cancel.
- Seller preference. Some listings indicate a preferred deposit amount or timing. Your agent can confirm expectations before you write.
A practical approach
Ask your agent for recent accepted-offer examples for similar homes in Mill Valley or San Rafael. Use those comps to set a target deposit that fits your budget and your contingency strategy. Aim for a number that signals commitment without creating undue risk.
Timing and escrow handling
When deposits are due
The purchase agreement controls the timeline. In many Marin transactions that use the California Association of REALTORS Residential Purchase Agreement, the standard language calls for the deposit to be delivered to the escrow holder within three business days after acceptance, unless the parties set a different timeline. In competitive situations, many listing agents expect funds very quickly, sometimes alongside the offer or immediately after acceptance.
How escrow holds your funds
- Neutral third party. Licensed escrow or title companies hold your deposit in a trust account and follow written instructions.
- Clear records. You receive a receipt and see the deposit on escrow statements. If the sale closes, the deposit is credited toward your purchase.
- Access limits. Sellers generally cannot access your deposit during escrow unless there is mutual agreement or a contractual default.
- Interest. Some trust accounts pay interest based on the escrow company and instructions, but not all do. Ask your escrow officer how their account works.
When your money is at risk
Protected by valid contingencies
If you cancel within the time allowed under a valid contingency, such as inspection, appraisal, financing, or title review, your deposit is typically refundable under the contract.
At-risk situations
- Waived or removed contingencies followed by a cancellation without a contractual right to do so.
- Missed deadlines for removing contingencies or closing.
- Financing denial after waiving a financing contingency.
- Bad faith use of a contingency, such as not pursuing financing.
Seller remedies and limits
Many California contracts include an optional liquidated damages clause. If both parties initial this clause and the buyer later defaults, the seller may retain the deposit as the sole remedy, subject to the agreement. If the clause is not selected, the seller could pursue actual damages, which may exceed the deposit. Escrow companies do not unilaterally release disputed funds, and many disputes require mutual written instructions, mediation, arbitration, or a court order.
Strategies to protect your deposit
Before you write an offer
- Review recent accepted offers. Ask your agent for local comps that show deposit sizes for similar Mill Valley or San Rafael homes.
- Confirm financing. Align your deposit and contingency periods with your lender’s timeline and a solid pre-approval.
- Prepare funds. Plan wiring steps in advance and know your escrow company’s secure procedures.
When you make the offer
- Match deposit to strategy. Choose a deposit that fits your competition level and your contingency plan.
- Write clear protections. Tie deposit release or refund to standard contingencies and exact dates in the agreement.
- Balance the terms. If you offer a smaller deposit, strengthen other terms such as proof of funds, timeline, or closing flexibility.
During escrow
- Keep everything in writing. Use the proper forms for contingency removals and changes. Do not rely on verbal agreements.
- Track deadlines. Calendar contingency dates and closing targets to maintain your rights.
- Document the file. Save inspection reports, lender emails, deposit receipts, and any addenda.
Wire-fraud prevention
- Verify instructions by phone using a known, published number for the escrow or title company.
- Use secure portals when provided by escrow.
- Never act on wiring changes sent by email without independent verification.
Escrow checklist
- Confirm your escrow holder and their licensing.
- Deliver the deposit on time and obtain a receipt.
- Review escrow statements to confirm the deposit is recorded.
- Understand the process for removing or preserving contingencies.
Local context: Mill Valley and San Rafael
Marin County is a high-cost market with generally low inventory. Well-priced homes, especially under two million dollars, often attract multiple offers. In these conditions, buyers commonly use meaningful deposits and tighter contingency periods to be competitive. Your best move is to tailor your deposit to the specific neighborhood, property condition, and number of competing offers on that home.
Final take
Your earnest money is both a signal and a safeguard. In Mill Valley and San Rafael, the right deposit amount comes from your price point, the level of competition, and a clear contingency plan. Choose a number that strengthens your offer and protect it with precise timelines, written forms, and careful escrow practices.
If you want a calm, data-informed plan for your next offer, connect with Kris Klein. You will get local comps, strategy aligned to your goals, and hands-on guidance from offer through closing.
FAQs
How much earnest money is typical in Mill Valley?
- Many buyers use 1 to 3 percent of the price or a flat amount such as 5,000 to 25,000 dollars, adjusted for competition and property type.
When is the deposit due in a Marin home purchase?
- The contract controls timing, and a common standard in California is delivery to escrow within three business days of acceptance unless the parties agree otherwise.
Can a seller keep my deposit if I cancel?
- If you cancel within a valid contingency period, your deposit is typically refundable. If you default without a contractual right to cancel, the seller may seek to keep it under the agreement.
What is the liquidated damages clause in California contracts?
- It is an optional clause that can limit the seller’s remedy to the deposit if the buyer defaults, but it must be explicitly chosen by both parties in the agreement.
How can I protect my deposit from wire fraud?
- Verify wiring instructions by calling the escrow company at a known phone number, use secure portals, and never rely on emailed changes without independent confirmation.
