What Is Earnest Money? Eugene Buyer Guide

Ever wondered why sellers ask for money before you even get the keys? If you are buying in Eugene, you will almost always see an earnest money deposit in your offer. It can feel confusing at first, especially if you are worried about risking your savings. By the end of this guide, you will know how earnest money works in Oregon, what is typical in Lane County, and what to do to protect your deposit every step of the way. Let’s dive in.

Earnest money basics in Oregon

What it is and why it matters

Earnest money is a good-faith deposit you make after your offer is accepted. It shows a seller you are serious and creates a financial stake that helps both sides follow the contract. If the sale closes, the deposit is credited to your down payment or closing costs.

Where your deposit sits

Your deposit is held by a neutral third party, usually an escrow or title company, a closing agent, or a brokerage trust account. In Oregon, licensed brokers and escrow holders must follow state rules for handling client funds. If questions arise about how funds are handled, you can contact the Oregon Real Estate Agency.

When you pay it

Your purchase agreement sets the deadline for delivery. In many Oregon transactions, buyers deposit funds within 24 to 72 hours after mutual acceptance. Always follow the exact timing and instructions in your signed contract.

Typical amounts in Eugene

What buyers often offer

There is no single correct amount. Many buyers use a flat number like 1,000 to 5,000 dollars on lower-priced homes or offer 1 to 3 percent of the purchase price. The right number depends on the property price and market conditions at the time you write your offer.

How local demand changes size

Eugene’s demand can shift by neighborhood and season. Areas near the University of Oregon or central neighborhoods can run hotter when inventory is tight. In more competitive situations, buyers sometimes increase their earnest money to make an offer stand out. Balance strength with safety so you only risk what you can afford if protections are waived later.

How your deposit is protected

Common contingencies

Your contract may include safeguards that allow you to cancel and recover your deposit if certain issues arise. Common protections include:

• Inspection contingency with a set review period
• Financing contingency if you need a loan
• Appraisal terms tied to your financing
• Title review and other due diligence items

When you can get money back

If you cancel within a valid contingency period and follow the notice steps and deadlines in your contract, you are generally entitled to a refund of your earnest money. If you remove or miss these protections, you may risk forfeiting some or all of the deposit if you cannot close.

When you could lose it

Missing deadlines or waiving safeguards

If you default after your contingencies expire or you waive them and then cannot complete the purchase, the seller may be entitled to keep the deposit under the contract’s terms. Appraisal shortfalls and loan issues are often handled through financing or appraisal language. If you waive financing and your loan falls through, you face greater risk to your deposit.

What happens in a dispute

Escrow holders usually will not release earnest money to either side without mutual written instructions or a legal order. If there is a disagreement, your contract’s dispute clause describes the process, which may include mediation, arbitration, or litigation. Some parties also pursue an interpleader action so a court can decide who receives the funds.

Step-by-step after acceptance

Follow these steps as soon as your offer is signed:

1. Confirm the escrow or title company and the exact delivery instructions.
2. Deliver your earnest money by the contract deadline. Use an approved method such as wire, cashier’s check, or personal check if allowed.
3. Get a written receipt that shows the date, amount, and who is holding the funds.
4. Calendar every contingency deadline and the method required to cancel or request repairs.
5. Keep copies of all confirmations and communications with escrow and your agent.

Contract terms to double-check

Before you wire or deliver funds, review these points with your agent:

• Deposit amount, due date, and acceptable payment methods
• Escrow or title company name and contact information
• Inspection, financing, appraisal, and title contingency timelines
• Instructions for deposit if the seller breaches or if you cancel validly
• Dispute resolution method, such as mediation or arbitration

Smart ways to strengthen your offer

You can show commitment without taking on unnecessary risk:

• Offer a larger deposit while keeping inspection and financing periods intact.
• Shorten timelines only if you are truly ready, such as having lender pre-approval and inspector availability.
• Aim for clear, clean terms rather than removing important protections.
• If increasing your deposit, consider tying it to specific contingency milestones so you stay protected.

How it applies at closing

If the sale closes, your earnest money is applied to your closing costs or down payment on the settlement statement. You will see the credit reflected in your final numbers from escrow.

Eugene-specific notes

Lane County closings run through local title and escrow companies, and deeds are recorded at the Lane County Recorder after closing. Recording occurs after funds are cleared, so it does not change how earnest money is handled, but it is part of the final process. For current local norms on typical deposit sizes, time to close, and contingency lengths, ask your agent for recent data from the local MLS or from area escrow companies.

Safety tips to prevent wire fraud

Wire fraud attempts are common and sophisticated. Protect your deposit by following these steps:

• Verify wiring instructions directly with the escrow or title company using a known phone number before sending funds.
• Do not rely on email alone for wiring instructions or changes.
• Never send money to an individual or to an account not listed on official escrow paperwork.
• After sending, confirm receipt with escrow and request a written confirmation.

A quick checklist you can use

• Confirm escrow holder and deposit method
• Calendar the deposit deadline and contingency dates
• Deliver funds and obtain a receipt
• Schedule inspection quickly and review results in writing
• Track loan milestones if financing
• Keep copies of all notices and confirmations

Buying in Eugene should feel confident, not stressful. With the right deposit strategy and clear contract protections, you can make a strong offer while safeguarding your funds. If you want a second set of eyes on your terms or need introductions to trusted local title and escrow teams, our boutique Lane County practice is here to help from contract to close.

Ready to talk through your offer strategy and deposit plan? Reach out to Parker Heights Realty to schedule a free consultation and home valuation.

FAQs

What is earnest money in Oregon home buying?

• It is a buyer’s deposit held by escrow or a brokerage trust account that shows good faith. If the sale closes, it is credited to your closing costs or down payment.

How much earnest money is typical in Eugene?

• Many buyers offer 1,000 to 5,000 dollars or 1 to 3 percent of the price. The right amount depends on property price and current competition.

When do I have to deposit the earnest money?

• Your contract controls the deadline. In many Oregon deals it is within 24 to 72 hours after mutual acceptance, but always follow your specific agreement.

Can I get my deposit back if I cancel?

• If you cancel within a valid contingency period and follow notice and timing rules in the contract, you are generally entitled to a refund of your deposit.

What if the appraisal comes in low in Eugene?

• If you have a financing contingency, you can usually renegotiate, request concessions, or cancel within the contingency timeline. Waiving financing increases your risk.

Who decides if there is a dispute over the deposit?

• Escrow often holds funds until both parties agree in writing or a mediator, arbitrator, or court issues an order, as described in your contract.