Buying in Sunnyvale can move fast, and the earnest money deposit is one of the first decisions you make once your offer is accepted. If you are relocating to Silicon Valley or purchasing your first home here, the dollar amounts and timelines can feel intense. The good news is that with clear steps and the right protections, you can use earnest money to strengthen your offer without taking on unnecessary risk. In this guide, you’ll learn how deposits work in Santa Clara County, what’s typical in Sunnyvale, how refunds are handled, and smart ways to protect your funds. Let’s dive in.
What earnest money is and why it matters
Earnest money is a good-faith cash deposit you pay after a seller accepts your offer. It shows you are serious and able to perform. If the transaction closes, this money is applied to your purchase price or closing costs.
Sellers care because the deposit signals commitment and, under many California contracts, can serve as limited liquidated damages if a buyer breaches after removing contingencies. The specific contract you sign controls when and how that applies.
In Santa Clara County, deposits are commonly held by a neutral escrow or title company. Funds are handled under written escrow instructions, not by the seller directly.
How much earnest money in Sunnyvale
Across the U.S., a 1–3% deposit is common in balanced markets. In competitive Silicon Valley areas like Sunnyvale, buyers often offer 3–5% to stand out. For the most sought-after properties, some buyers go even higher. Your strategy should reflect your budget, risk tolerance, and how competitive the listing is at the moment.
Here is a simple way to budget based on price points common in Sunnyvale:
- $1,000,000 home: 1% = $10,000, 3% = $30,000, 5% = $50,000
- $1,500,000 home: 1% = $15,000, 3% = $45,000, 5% = $75,000
- $2,000,000 home: 1% = $20,000, 3% = $60,000, 5% = $100,000
Because Sunnyvale prices are often well above national medians, run the percentages against your expected purchase price so you know what you will need on short notice.
When you pay and where the funds go
Most California offers require you to deliver the initial deposit to the escrow holder within a short window after acceptance. Two to three business days is typical, though your contract controls the exact timing. Be ready to move funds quickly.
Escrow is usually opened with a title or escrow company. Your funds are held in their trust account under the contract and escrow instructions. Sunnyvale transactions follow the same state framework, and most deposits are sent to escrow rather than to a broker’s account or the seller.
Refunds, contingencies, and timelines
Your deposit’s refundability is tied to your contingencies and the deadlines in your contract. Common buyer protections include:
- Inspection contingency for property condition
- Financing or loan contingency
- Appraisal contingency
- Title contingency
If you cancel within a valid contingency period and follow the contract’s notice procedures, your deposit is typically refundable. After you remove contingencies, refunds are harder to obtain and can depend on whether there is a breach and what your contract allows.
Typical timeline ranges in California include:
- Inspection: often 5–17 days after acceptance
- Loan: often 17–21 days
- Appraisal: sometimes aligned with the loan or set separately
These windows are negotiable, and local custom can vary. Always rely on the specific timelines stated in your signed purchase agreement.
How a larger deposit strengthens your offer
In multiple-offer situations, a larger deposit can set your offer apart by showing financial readiness. Other ways to make your deposit more compelling include delivering it faster, keeping clean escrow instructions, and adding an additional deposit tied to a clear milestone like formal loan approval.
Some buyers consider making part of the deposit non-refundable after certain milestones. This can be persuasive to a seller, but it increases your risk. Only consider this after you fully understand the consequences and feel confident about your financing and due diligence.
Avoiding unnecessary risk
Winning an offer does not require giving up all protections. You can stay competitive while managing risk by:
- Keeping your contingencies but tightening the timelines
- Providing proof of funds and a strong pre-approval letter
- Using an escalation clause instead of an unusually large deposit
- Offering a closing schedule or post-close possession that fits the seller’s needs
Waiving contingencies or committing to non-refundable deposits increases the chance of losing your money if the transaction falls through for buyer-related reasons. Balance confidence with caution.
Step-by-step: submitting and protecting your deposit
Follow these steps to move quickly and safely in Sunnyvale’s fast-moving market:
Confirm the deposit amount and deadline. Review your signed contract for the exact deposit amount, due date, and where to send funds.
Choose a payment method. Escrow will provide options such as a wire transfer or a cashier’s check payable to the escrow or title company. Ask your escrow officer which method they prefer and how they will acknowledge receipt.
Prevent wire fraud. Before wiring, call your escrow officer using a known phone number. Confirm the account name, routing number, and amount. Do not rely solely on emailed instructions. After sending the wire, confirm receipt the same day.
Keep records. Save wire confirmations, escrow receipts, and any addenda related to deposits or contingency extensions. Organized records make disputes easier to resolve.
Track contingency deadlines. Put every deadline on your calendar. Coordinate with your lender, inspector, and agent so you can remove contingencies with confidence or request an extension if needed.
Communicate in writing. If you need to cancel within a contingency period, give proper written notice as your contract requires. Escrow typically needs signed instructions from both parties to release funds.
Common Sunnyvale scenarios and smart responses
Multiple offers on a move-in ready home. Consider a deposit in the 3–5% range plus a shorter inspection timeline to compete while keeping protections. Provide a current pre-approval and proof of funds with your offer.
Appraisal concerns in a rising market. If you are concerned the appraisal might come in low, keep your appraisal or loan contingency intact. You can still be competitive by tightening the timeline and showing strong reserves.
Relocating from Oakland, Berkeley, or Hayward. If your funds sit across multiple banks, plan ahead so you can wire within 2–3 business days. Ask your bank about daily transfer limits and set up beneficiary accounts in advance.
Luxury or unique properties. Large deposits and custom milestones are more common at higher price points. If you add an additional deposit upon loan approval, make sure the terms and release conditions are clear in writing.
If a deal falls apart
If you cancel within a valid contingency and follow the contract’s notice terms, your deposit is usually returned by escrow. If parties disagree, escrow generally holds funds until there is a mutual release or an order via mediation, arbitration, or court. The contract’s dispute-resolution section outlines the process.
If a seller fails to perform, you can request your deposit back or pursue other remedies as permitted by the contract. Keep documentation and rely on your agent and escrow officer to guide the next steps.
Work with a team that knows Sunnyvale
In Sunnyvale’s fast-paced market, timing, paperwork, and strategy matter. You want clear guidance on deposit size, clean escrow instructions, and a plan to keep you protected while staying competitive. With deep experience across Santa Clara County and a calm, data-informed approach, our team helps you select the right deposit strategy for each property, coordinate escrow, and manage every contingency deadline so you move forward with confidence.
Ready to talk through your options and tailor a winning plan for your next offer in Sunnyvale? Connect with The Lister Team for a thoughtful consultation.
FAQs
How much earnest money should I offer in Sunnyvale?
- Start with 1–3% in balanced situations, and consider 3–5% for highly competitive listings. Calibrate the amount to your budget, risk tolerance, and the property’s demand.
When is my earnest money refundable in California?
- If you cancel within valid contingency periods and follow the contract’s notice procedures, deposits are typically refundable. After removing contingencies, refunds are less likely.
Who holds the earnest money in Santa Clara County?
- A neutral escrow or title company usually holds the funds in a trust account under written escrow instructions. The contract specifies the holder and timing.
How fast do I need to deliver my deposit after acceptance?
- Many contracts call for delivery within 2–3 business days. Your signed agreement controls the exact deadline, so be prepared to move funds quickly.
Is wiring my deposit safe?
- Yes, when you follow standard precautions. Verify wiring instructions by phone using a known number for your escrow officer, and confirm receipt immediately after sending funds.
