Not sure how much earnest money to put down on a Sunnyvale home? You want an offer that stands out without putting your deposit at unnecessary risk. In this guide, you will learn how earnest money works in Silicon Valley, what amount is typical in Sunnyvale, how refund rules tie to contingencies, and practical ways to structure a competitive deposit that still protects you. Let’s dive in.
What earnest money is
Earnest money is your good faith deposit. You deliver it to escrow shortly after a seller accepts your offer. The deposit is credited toward your purchase price at closing. A larger deposit can make your offer more appealing, but it also increases your exposure if you waive protections.
How much deposit is typical in Sunnyvale
Sunnyvale often sees higher deposits than the statewide average because prices are higher and competition can be intense.
- Standard offers often include about 1 percent of the purchase price.
- Strong or competitive offers frequently show 2 to 3 percent.
- Highly competitive situations or upper price tiers may reach 3 to 5 percent, or a larger flat amount.
What is normal varies by price tier. A deposit that aligns with a $1.5 million single family home is not the same as a $600,000 condo. The goal is to meet local expectations while keeping your risk in check.
When you pay and who holds it
In California, you typically deposit earnest money with an independent escrow or title company after your offer is accepted. Commonly used companies in the Bay Area include First American, Fidelity National Title, Old Republic, and Chicago Title. The listing agent often identifies the escrow holder in the purchase agreement.
Typical timing in California
Most purchase agreements require an initial deposit within 24 to 72 hours after acceptance. The California Association of Realtors forms usually state delivery within a set number of days, and local agents often choose two to three days. The exact deadline appears in your offer, so watch that date closely.
Additional deposits and escrow length
Some contracts call for a second deposit to bring the total to a customary percentage, for example an initial 1 percent followed by an additional 1 to 2 percent on a set date. Escrow periods in the Bay Area commonly run 21 to 45 days, depending on your lender and contingencies. If you are relocating and fully prepared, you may see 14 to 17 day escrows, but only when your financing and inspections can keep pace.
How escrow handles the funds
You will wire or deliver a check to the escrow company per written instructions. Escrow confirms receipt and holds funds in a trust account. At closing, the deposit is applied to your purchase price. If the transaction cancels, escrow follows the contract to determine whether the deposit is returned or held.
When your deposit is refundable
Whether your deposit is refundable depends on the contingencies in your contract and whether you follow the timelines and notice rules.
Common contingencies that protect you
- Loan financing if you cannot obtain financing within the agreed terms.
- Appraisal if the value comes in below the purchase price and you cancel or renegotiate within the timeframe.
- Inspection or investigation if issues arise during your inspection period.
- Title or HOA documents if material concerns are discovered that the contract covers.
Timing and notice matter
To preserve a refund right, you must act within the contract deadlines and send the required written notices. If you miss a deadline or do not deliver proper notice, you may forfeit refund rights. If you cancel for a reason not covered by a contingency, the seller may seek to keep the deposit if allowed by the contract.
HOA and condo considerations
For Sunnyvale condos or townhomes, review periods for HOA documents are common. Make sure your contingency timelines allow you to receive and evaluate HOA disclosures before you are required to remove contingencies or increase your deposit.
Key contract clauses to understand
- Escrow instructions vs. purchase agreement. Escrow follows the purchase agreement. Releasing earnest money usually requires mutual written instructions, an interpleader, or a court order. Escrow does not unilaterally release funds.
- Liquidated damages clause. Many California contracts include an optional clause that can limit the seller’s remedy to your deposit if you default. Whether it applies depends on the specific language and whether both parties initialed it. This can cap exposure, but read the exact terms in your contract.
- Lender interplay. A loan contingency protects you only if you comply with your financing obligations and invoke the contingency on time.
How to structure a competitive but protected deposit
Your goal is to balance strength with safety. Here are proven approaches used in Sunnyvale and nearby markets.
Strategy options
- Larger single deposit up front. A 2 to 3 percent deposit is a strong signal and simple to manage. It increases your exposure if you plan to waive contingencies, so reserve this for situations where your risk tolerance is higher.
- Split deposit. Deliver 0.5 to 1 percent within 24 to 72 hours, then add funds to reach 1.5 to 3 percent later, ideally before contingencies are due. This shows commitment while preserving flexibility during inspections and appraisal.
- Escalation with a standard deposit. Use an escalation clause to beat competing offers by a set amount while keeping a 1 percent deposit. This limits immediate cash risk, but verify that the seller will accept escalation terms.
- Appraisal gap coverage. Instead of removing the appraisal contingency entirely, agree to bring a fixed extra amount if appraisal is low. This narrows your downside and can reassure the seller.
- Waiving contingencies. This is the most competitive and the riskiest. Consider only if you can accept defects and delays or if you are paying cash with strong pre-offer due diligence.
Practical wording and timing
Spell out details in your offer: the amount, escrow holder name, delivery method, and due date for each deposit. Align any second deposit with your contingency removal calendar. Ask your agent to create a timeline you can follow day by day.
Verify wiring and prevent fraud
Wire fraud exists in the Bay Area. Before you send money, always confirm wiring instructions by calling the escrow office at a number you independently verify. Never rely on emailed instructions alone. Request a receipt as soon as funds hit the trust account.
Cross-county notes: Sunnyvale and the East Bay
If you write offers in both Santa Clara County and nearby East Bay cities like Oakland, Hayward, or Berkeley, escrow timelines and fees may differ slightly. Escrow is handled by the title company named in your contract, and the exact deposit and contingency timelines come from your offer terms. If you are buying across counties, ask your agent and the escrow officer to confirm any differences in recording cutoffs, delivery protocols, or HOA document timing so your deposit schedule still lines up with your protections.
Quick checklist before you send funds
- Confirm the deposit amount and its percent of price in writing.
- Verify the escrow company’s name and wiring instructions by phone.
- Note your delivery method and deadline for each deposit.
- Decide if you will split the deposit and list dates and amounts.
- Record contingency deadlines for inspections, loan, appraisal, HOA, and title.
- Check if the liquidated damages clause is selected in your contract.
- Include any appraisal gap or protective addenda you need.
- Know exactly how to send cancellation notices to preserve refund rights.
- Save contact info for your escrow officer and request a receipt when funds are received.
Final thoughts
In Sunnyvale, a thoughtful earnest-money strategy can help you win the home and still sleep at night. Aim for a deposit in the local norm, deliver it quickly, and tie every step to clear contingency timelines. Use split deposits, appraisal gap language, and verified wiring procedures to stay competitive without accepting unnecessary risk.
If you want a second set of eyes on your offer structure or deposit strategy, reach out to Babek Sandhar. You will get a calm, data-informed plan tailored to your price point and timeline.
FAQs
How much earnest money should I put down on a Sunnyvale house?
- In Sunnyvale, 1 to 3 percent is common, with higher amounts in very competitive situations; match local norms for your price tier and consider a split deposit to balance strength and flexibility.
When is the earnest money refundable in California purchases?
- Your deposit is typically refundable if you cancel within your contingency periods, such as loan, appraisal, inspection, HOA, or title, and you deliver the required notices on time.
What happens if I wire my deposit to the wrong account?
- Contact your bank and the escrow company immediately; verify wiring instructions by phone before sending funds because wire fraud is a known risk and recovery can be difficult.
Does the earnest money count toward my closing costs?
- Yes, your deposit is applied to the purchase price at closing, so you receive full credit for it if the transaction closes.
Can the seller keep my deposit if inspections find problems?
- Not if you have an inspection contingency and you cancel properly within the deadline; if you miss the timeline or cancel for a reason not covered, the seller may seek to keep the deposit under the contract.
