Buying a home in Portland comes with a lot of moving parts. One piece that can feel confusing is earnest money — the deposit you put down to show you’re serious. You want your offer to stand out without putting your money at risk. In this guide, you’ll learn how earnest money works in Oregon, what’s typical in Portland, how contingencies protect your deposit, and what timelines to expect. Let’s dive in.
What earnest money is
Earnest money, also called an earnest money deposit or good‑faith deposit, is money you put down when your offer is accepted. It shows commitment to the seller and becomes part of your funds at closing. If the sale closes, it is usually applied to your down payment or closing costs.
It is not an extra fee. It is a credit toward your purchase if you complete the transaction. The purchase agreement controls how it is handled and when it is refundable.
Who holds your deposit in Oregon
In Oregon, the purchase agreement states who will hold your earnest money and how it will be handled. Most Portland buyers deliver the deposit to a neutral third party, such as an escrow or title company, following the contract’s instructions.
Escrow and title companies follow strict procedures for receiving, accounting for, and releasing funds. If there is a dispute at the end of a failed transaction, the agreement will outline how that dispute is handled, which can include mutual release instructions or other remedies.
How much earnest money in Portland
There is no single rule for the amount. Local practice varies by price point and how competitive the market feels at the time of your offer.
- Many Portland offers use a deposit in the range of a few thousand dollars for entry‑level and mid‑market homes.
- In more competitive situations or for higher‑priced homes, buyers often use a percentage, commonly around 1–3% of the purchase price.
- The right number depends on property price, inventory, and whether you are keeping or waiving contingencies.
During tight inventory periods, sellers may expect higher deposits. In slower markets, smaller deposits may still be competitive. Your exact strategy should reflect current conditions and your risk comfort.
When your deposit is due
Your purchase agreement sets a clear deadline for delivering earnest money. In many Oregon contracts, the deposit is due shortly after mutual acceptance, often within 1 to 3 business days. The agreement may require funds to be wired or delivered as a cashier’s check.
If you miss the deadline, the seller may have contract remedies, including cancellation rights. Deliver the funds on time and get a written receipt from the escrow or title company.
Contingencies that protect your money
Contingencies are contract protections. When you follow the contract’s timelines and notice rules, these can allow you to cancel and get your deposit back.
Inspection and due diligence
An inspection period lets you evaluate the property. If you discover issues and choose to terminate within the inspection window using the required notice, your earnest money is typically refundable under the agreement.
Financing (mortgage) contingency
If you apply in good faith but cannot obtain loan approval by the deadline, the financing contingency can protect your deposit when you provide the required notice on time.
Appraisal contingency
If the appraisal comes in below the purchase price, this contingency may allow you to renegotiate or terminate according to the procedures in your agreement.
Title contingency
If title issues are found and not cured within the contract period, you may be able to terminate and receive a refund of your earnest money as outlined in the agreement.
Sale‑of‑home contingency
If you need to sell a current home to complete the purchase, this contingency can provide protection if that sale does not occur within the stated timeline.
How buyers can lose earnest money
You can put your deposit at risk if you do not follow the contract. Common pitfalls include:
- Missing the deposit delivery deadline.
- Failing to provide required written notices within the inspection, financing, or appraisal timelines.
- Unilaterally canceling without an allowed reason.
- Waiving key contingencies and then backing out for reasons covered by those contingencies.
The exact outcomes depend on your contract language, including any liquidated damages terms.
Oregon timelines at a glance
Every deal is different, but many Portland offers follow a similar rhythm:
- Earnest money delivery: usually within 1–3 business days after mutual acceptance, per the contract.
- Inspection period: often 7–14 days. Complex properties may need longer; highly competitive offers may propose shorter windows.
- Financing and appraisal: commonly 21–30 days for loan approval and appraisal completion, depending on lender and loan type.
- Closing date: frequently 30–45 days from acceptance, but negotiated to fit both parties.
Your agreement is what governs. Fill in specific dates or day counts and track them closely.
Smart steps to protect your deposit
Use a simple checklist to stay on track:
- Set realistic contingency timelines. Confirm inspection scheduling and lender timing before you write the offer.
- Deliver earnest money on time. Use a traceable method and obtain a written receipt from escrow or title.
- Keep proof of notices. Send required notices in writing per the agreement and save confirmations.
- Avoid unnecessary waivers. Understand how waiving contingencies changes your risk.
- Ask early about dispute procedures. If a conflict arises, your escrow holder will usually need mutual instructions or will follow the dispute section of the contract. Consider legal counsel for significant sums.
Make your offer competitive without extra risk
You can show commitment without overexposing your deposit. Consider these levers:
- Pair a solid deposit with strong, realistic timelines and complete documentation.
- Keep key protections like inspection, financing, and appraisal, but tighten them thoughtfully to match your lender and inspector availability.
- Coordinate early with your lender so financing milestones are achievable within the agreed period.
A well‑crafted offer can stand out while keeping your earnest money protected by the contract.
Work with a local pro
Portland practices can shift with inventory and demand. An experienced, process‑driven advisor helps you set the right deposit, choose the right timelines, and follow every notice requirement. If you want a clear plan and careful coordination from offer to closing, connect with Tracy Brophy for guidance tailored to your goals.
FAQs
How much earnest money is typical for Portland buyers?
- Many buyers use a deposit of a few thousand dollars for mid‑market homes, while competitive offers or higher‑priced homes often use about 1–3% of the purchase price.
Is earnest money refundable in Oregon home purchases?
- It is generally refundable if you properly terminate under contract contingencies, such as inspection, financing, or title, within the deadlines and with the required written notice.
Who holds the earnest money in a Portland transaction?
- The escrow or title company named in your purchase agreement usually holds the deposit as a neutral third party under written instructions.
When is earnest money due after my offer is accepted in Oregon?
- The agreement sets the deadline; many contracts require delivery within 1–3 business days after mutual acceptance, using a wire or cashier’s check.
What are common ways buyers lose earnest money in Portland?
- Missing deposit or contingency deadlines, failing to send required written notices, canceling without a permitted reason, or waiving protections and then backing out can put the deposit at risk.
