Making an offer in Russian Hill can move fast, and your earnest money is often your first impression. You want to stand out without taking on unnecessary risk. In this guide, you’ll learn how much buyers typically deposit in San Francisco, when it is due, how escrow holds it, and how to protect your funds with the right contingencies. Let’s dive in.
Earnest money basics
Earnest money is a good‑faith deposit that shows the seller you are serious. A neutral escrow or title company holds the funds until closing. If the sale closes, the deposit is credited toward your down payment and closing costs.
Think of it as both a negotiating tool and a financial risk point. The amount, timing, and your contingency plan all matter in San Francisco’s competitive market.
Typical deposit sizes in Russian Hill
San Francisco’s high prices mean deposits are often larger than in many U.S. markets. Buyers in Russian Hill commonly offer a percentage of the purchase price or a specific flat amount.
- In many markets, a starting point is around 1 to 3 percent.
- In competitive San Francisco neighborhoods like Russian Hill, buyers often choose higher deposits, frequently 3 to 5 percent or more, or a bold lump sum to stand out.
- There is no set rule. The “right” amount depends on the property price, how competitive the offer landscape is, and your risk tolerance.
A larger deposit can strengthen your offer, but it also increases your exposure if you later default without a valid contingency. Balance strength with protection.
When your deposit is due
Once your offer is accepted, the initial deposit is typically due quickly. Most contracts call for delivery within a short window, often 24 to 72 hours after acceptance. Your exact due date will be written into the contract.
Some buyers use staged deposits. You might deliver a smaller initial amount at acceptance and then increase the deposit when you remove key contingencies, such as your loan contingency. This signals commitment while limiting exposure early on.
How escrow holds your funds
Escrow or a title company holds the deposit as a neutral stakeholder. They do not release funds unless both parties agree in writing or a court instructs them to do so.
At closing, escrow applies your earnest money to your down payment and closing costs. If you cancel within a valid contingency period, the deposit is typically returned per the contract.
Safe payment and wire fraud tips
You can pay the deposit by cashier’s check, certified check, or wire transfer to the escrow company. Personal checks are less common for larger amounts.
Wire fraud is a real risk in real estate. Protect yourself by following these steps:
- Always confirm wiring instructions directly with the escrow company using a verified phone number you obtain independently.
- Verify the escrow officer’s name and account details before sending funds.
- If anything changes by email, call the verified number to confirm before you act.
- Keep records of your transfer for your lender and your files.
Lenders will also ask you to document the source of your earnest money during underwriting. Plan ahead with bank statements, gift letters if needed, and documentation for any large deposits.
Contingencies that protect you
Contingencies give you time to investigate the property and financing. If you cancel within the agreed window, your deposit is usually refundable.
- Inspection contingency. Allows you to inspect the property and request repairs or credits. If you cancel within the period, you can typically recover your deposit.
- Loan contingency. Protects you if you cannot obtain financing per the contract terms within the timeframe.
- Appraisal contingency. If the appraisal comes in below the purchase price, you can try to renegotiate, bring additional funds, or cancel within the window.
- Title review. You can review the preliminary title report and raise objections to certain issues. Some title problems can be grounds to cancel and receive a refund.
Contingency periods are negotiated in the offer. Once you remove contingencies in writing, your ability to recover the deposit becomes limited.
When you can lose the deposit
If you default on the contract without a valid contingency, the seller may be entitled to your deposit as liquidated damages or may seek other remedies, depending on the terms you agreed to in the purchase agreement.
Common risk points include missing contingency deadlines, failing to deliver your deposit on time, or backing out after you have removed contingencies in writing. While many disputes are negotiated, escrow will not release funds without written agreement from both parties or a court order.
If a dispute arises, your contract may require mediation or arbitration. Escrow can also seek a court process called interpleader, which lets a judge decide who receives the funds.
Competitive offer strategies
In Russian Hill, sellers often prefer clean, decisive terms. You can make your offer competitive while managing risk by focusing on a few smart tactics.
- Calibrate your EMD. Choose a deposit amount that is strong for the price point. In hot situations, you may offer a larger deposit to signal certainty.
- Use staged deposits. Combine a smaller initial deposit at acceptance with a larger increase after a key contingency removal.
- Right‑size your timelines. Set inspection, loan, and appraisal periods that your team can meet. Shorter periods may help your offer, but do not set deadlines you cannot keep.
- Keep documentation ready. Your lender and escrow will move faster if you prepare proof of funds and deposit receipts in advance.
Pre‑offer checklist
Use this quick checklist before you write an offer in Russian Hill:
- Discuss earnest money strategy with your agent, including amount, timing, and whether to stage deposits.
- Get a strong lender pre‑approval and align contingency timelines with your lender’s underwriting calendar.
- Gather documentation for your deposit source, including bank statements and any required gift documentation.
- Confirm your preferred escrow company’s wiring procedures and verified contact information.
During escrow: what to do
- Deliver your deposit on time and get a written receipt from escrow.
- Save all documentation of your payment and source of funds for underwriting.
- Track all contingency deadlines on a shared calendar.
- Remove contingencies in writing according to the contract instructions. Email alone may not be sufficient.
- Follow verified wiring protocols for any additional funds to prevent fraud.
If plans change
If you need to cancel within a valid contingency window, submit written notice in the form your contract requires. Ask escrow for a written confirmation of the deposit release.
If the seller alleges default, consult your agent and, if needed, an attorney before agreeing to forfeit any funds. If both parties cannot agree, escrow will hold the money until there is a mutual written release or a court order.
Real‑world scenarios
- Cancel during inspection. You discover issues during your inspection and cancel before the deadline. Your deposit is typically returned per the contract.
- Financing falls through. Your lender declines the loan and you cancel within the loan contingency. Your deposit is typically refundable.
- Contingencies removed, then you cancel. You later back out without a contractual basis. The seller may claim the deposit as liquidated damages or seek other remedies, depending on the agreement.
- Multiple offers. You increase your EMD and stage a second deposit after loan contingency removal. Your offer stands out, but your exposure increases if you later default without a contingency.
Move forward with confidence
A well‑planned earnest money strategy can help you win in Russian Hill while protecting your funds. The keys are clear timelines, right‑sized contingencies, safe payment practices, and expert guidance tailored to the property and market conditions.
If you are preparing to buy in San Francisco, partner with a local advisor who negotiates these terms every day. For one‑on‑one guidance and a strategy that fits your goals, connect with Susanne Alexander.
FAQs
What is earnest money in San Francisco purchases?
- It is a good‑faith deposit held by a neutral escrow or title company and applied to your down payment or closing costs at closing.
How much earnest money should I put down in Russian Hill?
- There is no fixed rule. Many buyers choose a higher percentage in competitive neighborhoods, often in the 3 to 5 percent range or a strong flat amount, based on risk tolerance and offer strength.
When is my earnest money due after offer acceptance?
- The purchase contract sets the deadline. In practice, it is often due within 24 to 72 hours after acceptance.
Who holds the deposit and can the seller access it?
- A neutral escrow or title company holds the funds. They do not release money to either side without mutual written instructions or a court order.
What contingencies protect my deposit?
- Inspection, loan, appraisal, and title review are common protections. If you cancel within these periods, your deposit is typically refundable per the contract.
Can I lose my earnest money if I back out?
- Yes, if you default after removing contingencies or miss deadlines without an agreed extension, the seller may be entitled to your deposit under the contract.
How do I avoid wire fraud when sending my deposit?
- Call the escrow company using a trusted phone number to confirm wiring instructions, verify the officer’s details, and never rely on unverified email changes.
How will my lender treat the earnest money?
- Your lender will ask for proof of the deposit and the source of funds, and will credit it toward your down payment at closing.
