Ready to write an offer in Northeast Portland but unsure how earnest money works? You are not alone. This deposit is a real commitment, and it can also be a smart way to strengthen your offer when the market heats up. In this guide, you will learn how much buyers typically put down in NE Portland, how your deposit is held and protected, when it is refundable, and how to avoid common pitfalls. Let’s dive in.
What earnest money is
Earnest money is your good faith deposit that goes in with an accepted purchase offer. It shows a seller you are serious about closing. The funds are held in a trust or escrow account and, if the sale closes, they are credited to your down payment or closing costs.
Your purchase agreement controls how earnest money is handled. In Oregon, buyers and sellers often use standardized REALTOR forms along with escrow instructions. The contract sets the deposit amount, who holds it, deadlines, and the remedies available if one party defaults.
Typical amounts in NE Portland
There is no single right number, since amount depends on price point and how competitive the listing is. As a local rule of thumb, buyers in Multnomah County often see:
- Lower priced homes with modest competition: several thousand dollars, often around $2,000 to $5,000.
- Mid price homes with typical competition: $5,000 to $20,000, or roughly 1 to 2 percent of the price.
- High competition or multiple offers: 3 percent or more, or a higher flat amount to stand out.
Use these as ranges, not promises. Your agent can help you choose an amount that fits the home, your financing, and the current micro market in NE Portland.
What drives deposit size
A few factors tend to move earnest money up or down:
- Strong competition and multiple offers often push deposits higher.
- Waiving contingencies can lead buyers to increase the deposit to signal commitment.
- Cash offers or escalation clauses can be paired with larger deposits.
- Slower conditions, more inventory, or keeping key protections can support a more conservative amount.
If you plan to keep robust inspection and financing contingencies, you might not need the largest deposit to be competitive. If you plan to limit protections, consider a higher deposit and be sure you are comfortable with the risk.
How funds are held and protected
In Portland, earnest money is usually held by an escrow or title company in a trust account. In some cases, a broker’s licensed trust account may hold the funds if the contract instructs it. Either way, the money is kept separate from operating funds under state rules.
Ask for a receipt once you deliver your deposit and save it. The purchase agreement and escrow instructions will specify who holds the funds and how any dispute is handled. At closing, your deposit is credited on your final settlement statement toward your down payment or closing costs.
When your deposit is refundable
Your contract can give you rights to cancel and receive your deposit back within certain windows. Common protections include:
- Inspection contingency that lets you inspect and cancel within the inspection period if needed.
- Financing contingency if you are unable to secure loan approval by the deadline.
- Appraisal contingency if the appraisal comes in low and the seller will not adjust.
- Title contingency if title defects are not cured.
- Disclosures and statutory protections if required information reveals issues and the contract allows cancellation.
If you cancel within a valid contingency period and follow the notice steps in the contract, your deposit is typically returned.
When your deposit is at risk
Your earnest money may be at risk if you default or cancel outside of allowed reasons. Scenarios include:
- You waive contingencies and later back out for personal reasons.
- You miss a contract deadline, such as failing to deliver the deposit on time.
- You fail to close without a permitted contractual reason.
If there is a dispute, escrow will usually hold the funds until both parties sign a release or there is a legal decision per the contract. Many agreements provide for mediation or arbitration steps.
Key deadlines to track
Timeframes vary by contract, but these items are common in NE Portland transactions:
- Earnest money due within a few business days after acceptance.
- Inspection period often runs about 5 to 10 days, depending on what you negotiate.
- Loan approval and financing contingency deadlines usually track your closing date and lender schedule.
- Appraisal timing often ties to your financing contingency.
Put every deadline in your calendar, set reminders, and confirm each notice you send is in writing and delivered per the contract instructions.
Real world examples
- Inspection discovery and refund: You offer on a NE Portland home with a standard inspection contingency. The inspector finds a major structural issue. You cancel within the inspection period in writing. Your deposit is returned under the contingency.
- Waived inspection and risk: You waive inspection to compete in a multiple offer situation and later decide to cancel. Since you removed that protection, the seller may claim your deposit under the contract’s remedies.
- Dispute and hold: You believe you canceled properly, but the seller disagrees. Escrow holds the funds until both sides sign a release or there is a mediation, arbitration, or court direction.
Local nuances to expect
Competitiveness can shift quickly from one NE Portland pocket to another. Some listings attract multiple offers within days, while others move more slowly. Many listing brokers include preferred escrow instructions and deposit expectations in the MLS or offer package. Ask your agent to confirm where funds should be delivered and any norms for that property category.
Oregon forms spell out how deposits are handled, including dispute steps. Local escrow companies follow fiduciary rules that require funds to be held in trust and disbursed only by written instructions or legal authority.
Buyer checklist: next steps
- Discuss deposit strategy with your agent, including amount, timing, and how it aligns with contingencies.
- Get fully pre approved for a mortgage to support your financing contingency.
- Ask the listing side how earnest money is typically handled for the property and which escrow company will hold funds.
- Confirm payment method and verify wire instructions directly by phone with your escrow officer.
- Obtain and save your escrow receipt as soon as the deposit is posted.
- Calendar inspection, appraisal, financing, and document deadlines and send notices in writing.
- For unusual or high value deals, consider speaking with a real estate attorney in addition to your agent.
Avoid wire fraud
Wire fraud scams target buyers during deposit and closing. Protect yourself by verifying wiring instructions directly with your agent and escrow officer using known phone numbers. Do not rely on email instructions alone. If anything looks off, stop and call before sending funds.
Bottom line for NE Portland buyers
Earnest money is a tool to show commitment and help your offer stand out. The right amount depends on price point, competition, and your comfort with contingencies. Keep your protections, deadlines, and delivery steps tight so your deposit stays safe.
If you want a tailored deposit strategy and a clean, competitive offer plan, connect with Rebecca Lee. You will get clear guidance, market aware negotiation, and hands on transaction management from a seasoned local broker.
FAQs
How much earnest money should I put down in NE Portland?
- It varies by home and competition, but many buyers see $5,000 to $20,000 or about 1 to 2 percent in typical scenarios, with higher deposits in multiple offer situations.
Who holds earnest money in Portland transactions?
- Most deposits are held in an escrow or title company trust account, though a licensed broker trust account can be used if the contract instructs it.
When is earnest money refundable after inspection?
- If your contract includes an inspection contingency and you cancel within that window using proper written notice, the deposit is typically returned.
What happens if the appraisal comes in low in Multnomah County?
- If you have an appraisal or financing contingency, you can renegotiate or cancel within the deadline if the seller will not adjust, which usually protects your deposit.
What if the seller tries to keep my deposit but I disagree?
- Notify your agent and escrow in writing and expect escrow to hold the funds until there is a mutual release or a legal resolution as directed by the contract.
How soon is earnest money due after my offer is accepted?
- Many contracts require delivery within a few business days after acceptance, so plan ahead for wiring or check delivery and confirm receipt with escrow.
