Buying in San Mateo comes with a lot of moving parts, and earnest money is one of the first you’ll encounter. You might be wondering how much to put down, when it’s due, and how to protect it. A clear plan helps you compete without risking more than you intend. In this guide, you’ll learn local norms, timelines, and practical steps to keep your deposit safe so you can move forward with confidence. Let’s dive in.
Earnest money basics in California
Earnest money is a good‑faith deposit you give when your offer is accepted. In California, the escrow or title company holds it and applies it to your down payment or closing costs at closing. The purchase contract and escrow instructions spell out how much you deposit, when it’s due, and when it can be refunded.
Who holds your deposit
In San Mateo County, established escrow and title companies commonly hold earnest money. You’ll receive an escrow receipt when funds are received. Escrow will not release money unless both parties give written instructions or a court orders it.
How much is typical in San Mateo
There is no fixed rule, but local deposits trend above national averages because home prices are higher and the market can be competitive. For entry or mid‑range homes, initial deposits often land in the several‑thousand to tens‑of‑thousands range, commonly around 5,000 to 25,000 dollars. For seven‑figure homes, a percentage is more common, often 1 to 3 percent of the price, and some buyers offer more in very competitive situations.
Many contracts use a two‑step structure: an initial deposit at acceptance and an additional deposit a few days later to reach the total amount you negotiated. The numbers and timing are part of your offer strategy.
When your deposit is due
Your purchase agreement sets the deadline. In California, it’s often a short window, commonly within 2 to 3 business days of offer acceptance. Some escrow holders expect same‑day or next‑day delivery, so plan ahead and have funds ready.
How to deliver funds safely
- Wire transfer to the escrow account using instructions provided by escrow.
- Cashier’s check delivered to the escrow or title office.
- Always get an escrow receipt and written confirmation when funds are received.
- To reduce wire‑fraud risk, call the escrow company at a verified phone number before sending any wire. Do not rely only on emailed instructions.
Contingencies that protect your deposit
Contingencies are your safety valves. If you cancel within a contingency period and follow the contract’s notice rules, your deposit is generally refundable.
- Inspection contingency: lets you investigate the property and cancel within the set period if needed.
- Loan contingency: protects you if financing cannot be obtained per the terms.
- Appraisal contingency: helps if the property appraises below the purchase price and you cannot reach a solution.
- Title or HOA document review: allows cancellation if documents reveal unacceptable issues.
- Sale‑of‑home contingency: for buyers who need to sell another property first.
When deposits become non‑refundable
Once you remove a contingency or let its period expire, you usually give up the right to a deposit refund unless the seller defaults. Typical timeframes in local practice are 7 to 17 days for inspections and 17 to 21 days for financing, with appraisal usually tracked to the loan period. These are negotiable and should be written into your contract.
Escrow timelines in San Mateo
A typical escrow for a financed purchase in the Bay Area runs about 30 to 45 days from mutual acceptance. Your contingency periods run inside that timeline. Finishing inspections, appraisal, and loan underwriting on schedule helps you keep deposit protections in place until you’re confident to proceed.
Risks, disputes, and releases
The biggest risks to your deposit are missing a deadline, removing contingencies too early, or backing out for reasons not protected by the contract. Wire fraud is another major risk; always verify wiring instructions by phone using a known good number.
If a dispute arises, escrow cannot release funds without mutual written instructions or a court order. Many contracts include forms for mutual release or set out mediation or arbitration steps if needed. Disputes can be time‑consuming and costly, so clear documentation and on‑time notices are key.
Your San Mateo EMD action plan
- Confirm the deposit strategy with your agent: single large deposit or small initial plus second deposit.
- Get pre‑approved and align lender timelines with your loan and appraisal contingency days.
- Set realistic contingency periods and schedule inspections and appraisal right away.
- Calendar every deadline and send required notices in writing before any period expires.
- Verify wire instructions by phone with escrow before sending funds and keep all receipts.
- Ask escrow for their exact delivery methods, cut‑off times, and confirmation process.
Strategy tips for competitive offers
- Use a deposit that is meaningful for the price point without exceeding your risk comfort.
- Shorten contingency periods only if your lender and inspectors can meet the timeline.
- Consider a smaller initial deposit with a larger second deposit after key contingencies if that better balances risk and competitiveness.
- Do not waive protections lightly. A strong, well‑timed offer can be competitive while still protecting your funds.
Work with a local advisor
San Mateo’s market moves quickly, and norms can shift with conditions. A local, process‑driven plan helps you stay competitive while protecting your money. If you want a clear deposit strategy, timeline management, and coordination with escrow and lenders, reach out to Aladdin for a calm, structured approach that puts your interests first.
Ready to buy with confidence? Connect with Aladdin Kanawati for local guidance and an offer plan tailored to your goals.
FAQs
How much earnest money is normal in San Mateo?
- Expect higher deposits than national averages. Many buyers use several thousand to tens of thousands of dollars up front, or 1 to 3 percent of the price for higher‑priced homes, sometimes more in hot markets.
When do I have to deliver my deposit in California?
- The contract specifies the deadline. In local practice it is often within 2 to 3 business days of acceptance, so plan to move funds quickly and get an escrow receipt.
Can I get my deposit back if I change my mind?
- You can typically receive a refund only if you cancel within an active contingency period and give timely written notice as the contract requires. After contingencies are removed, deposits are often non‑refundable.
Who holds my earnest money and how is it released?
- The escrow or title company holds the funds and releases them only with mutual written instructions from both parties or a court order, per the contract and escrow instructions.
How do I avoid wire fraud when sending my deposit?
- Call the escrow company at a verified phone number before wiring any money, confirm all details, and never rely solely on emailed instructions. Keep your wire receipt and escrow confirmation.
