Wondering how much earnest money you should offer on a Corona home? You are not alone. Earnest money can feel confusing, especially when you are trying to stand out without taking on unnecessary risk. In this guide, you will learn what earnest money is, how much buyers in Corona typically put down, which contingencies protect you, and how to plan a smart deposit strategy that fits today’s market. Let’s dive in.
Earnest money basics
What it is and why it matters
Earnest money, sometimes called a good‑faith deposit, is the money you put into escrow after a seller accepts your offer. It shows you are serious and ready to move forward. It is separate from your down payment and closing costs, but it is usually credited toward your purchase at closing.
For sellers, earnest money provides short‑term security while you complete inspections, appraisal, and loan approval. For buyers, it helps your offer look stronger, especially if a home has multiple offers.
Who holds the funds
Your deposit goes to a neutral third party, typically an escrow or title company. The money is held under the escrow instructions in your purchase contract. In Corona and across Southern California, California Association of Realtors forms and escrow instructions are commonly used.
How you pay safely
Escrow will tell you how to deliver funds, often by cashier’s check or wire transfer. To protect yourself, verify wiring instructions directly with the escrow company by phone using a number you trust. Do not rely only on email instructions.
Typical deposit ranges in Corona
Ranges you will see
There is no single standard number for Corona. Deposits are often described as a percentage of the price or a flat amount.
- Common percentage range: 1% to 3% of the purchase price.
- Common flat amounts: about $5,000 to $20,000, depending on price and competition.
- In competitive situations, buyers sometimes offer larger deposits, such as 3% to 5% or more, to stand out.
For lower‑priced homes or listings with modest competition, sellers often accept deposits in the $5,000 to $10,000 range. For higher‑priced homes or hot listings with short days on market, deposits of 1% to 3% of the purchase price or $10,000 to $50,000 are not unusual.
How market conditions change amounts
Corona sits within the Inland Empire market, where inventory and buyer demand ebb and flow. When supply is tight, deposit amounts tend to go up as buyers look for ways to strengthen offers. If the market is slower or a home has been on the market longer, you might be able to offer a smaller deposit within the typical ranges.
How to choose your number
Think about price, competition, and your risk tolerance. A larger deposit can help your offer compete, but it increases risk if you later remove contingencies and cannot close. A reasonable approach is to pick a deposit that shows commitment while keeping your key contingencies in place until you are confident in inspections, appraisal, and loan approval.
How escrow handles your deposit
When it is credited back to you
Your earnest money is part of your funds for closing. At the end of escrow, it is credited toward your down payment and closing costs. If you cancel during a valid contingency period, your deposit is typically refundable to you.
When you could lose it
If you remove contingencies and then breach the contract, the seller may be entitled to keep the deposit as damages. California purchase agreements often include an optional liquidated‑damages clause that can limit the seller’s recovery to the deposit. This clause applies only if it is elected in the contract. Make sure you understand exactly what is checked and agreed to before you sign.
What happens if there is a dispute
If the buyer and seller disagree about who should get the deposit, the escrow holder will usually keep the funds until it receives a joint written instruction or a final court or arbitration order. Your purchase agreement and escrow instructions will outline the dispute process and any mediation or arbitration requirements.
Contingencies that protect you
Inspection contingency
This gives you time to hire inspectors, review findings, and request repairs or credits. If you find major issues, you can cancel within the contingency window and typically receive your deposit back. Making an “as‑is” offer without an inspection contingency increases your risk.
Loan contingency
If you are financing the purchase, this protects you if your lender cannot approve your loan in time. If financing falls through and your loan contingency is still active, you can usually cancel and recover your deposit.
Appraisal contingency
If the appraisal comes in below the contract price, this contingency lets you renegotiate, bring extra funds, or cancel within the timeframe. If you waive this contingency and cannot cover the difference, your deposit could be at risk after contingency removal.
Title and home‑sale contingencies
A title contingency lets you review the title report and object to defects so you receive marketable title. A home‑sale contingency ties your purchase to the sale of your current home. Home‑sale contingencies are less common in competitive markets because they add complexity and time.
Typical timelines in California
Timeframes are negotiated in your contract, but common ranges are helpful for planning:
- Inspection contingency: often 7 to 17 days after acceptance. Many buyers use 10 days.
- Loan contingency: commonly 17 to 21 days, depending on the lender and file.
- Appraisal timeline: usually occurs within the loan or a dedicated appraisal window.
- Title review: the report is delivered early in escrow, with a set period to object.
While contingencies are active, you typically have the contractual right to cancel and reclaim your earnest money. Once you remove them, canceling later can put your deposit at risk.
Strategy tips for Corona buyers
Before you write an offer
- Get a strong lender preapproval and collect proof of funds to show you can make the deposit.
- Discuss deposit strategy with your agent based on neighborhood norms and competition.
- Decide if you will offer only standard earnest money or add any nonrefundable funds. Use caution with nonrefundable money until appraisal and loan are clear.
Deposit logistics
- Confirm the escrow company’s name and wiring instructions directly with the escrow officer.
- Keep funds in an account that can issue a cashier’s check or wire quickly.
- Track contract deadlines so you know when earnest money and contingency actions are due.
Negotiation ideas
- A larger deposit paired with shorter, realistic contingency periods can signal strength without taking on unnecessary risk.
- If a seller asks for no contingencies, understand the tradeoffs. You can often make a competitive offer by keeping key protections and tightening timelines.
- If you need to include a home‑sale contingency, be realistic about timing. Consider alternatives like rent‑back or bridge options if the market is highly competitive.
If issues arise during escrow
- Keep written records of inspections, lender updates, and repair requests.
- Communicate early with your agent and escrow officer if you need more time.
- Do not remove contingencies until you are comfortable proceeding.
Quick example timeline
Imagine you have a 10‑day inspection contingency and a 17‑day loan and appraisal window. In the first week, you complete inspections and request repairs. By day 10, you decide to remove the inspection contingency because any issues are resolved. Your lender receives the appraisal by day 14 and clears conditions by day 17. Once you remove loan and appraisal contingencies, your deposit has more risk. If you cancel after that point without a valid contractual reason, you may forfeit your deposit.
The bottom line for Corona buyers
Earnest money shows good faith and helps your offer stand out. In Corona, typical deposits often fall between 1% and 3% of the purchase price or $5,000 to $20,000, with higher amounts in hot segments. Your contingencies are your safety net. Keep them in writing, track deadlines, and remove them only when you are confident about inspections, appraisal, and financing. A thoughtful strategy can balance offer strength with protection.
Ready to craft the right deposit and contingency plan for a Corona purchase? Connect with a local expert who knows the neighborhoods and current norms. Reach out to Lisa Costa to plan your next move.
FAQs
How much earnest money should I offer in Corona?
- Many buyers offer 1% to 3% of the price or a flat $5,000 to $20,000, adjusting higher for hot listings and higher price points.
Is earnest money part of my down payment?
- Yes. It is credited toward your purchase at closing. You still bring the rest of your down payment and closing costs.
Can I lose my earnest money if the appraisal is low?
- Not if your appraisal contingency is active. You can renegotiate, add funds, or cancel within the window. Waiving this protection increases risk.
Who holds my earnest money in Corona transactions?
- A neutral escrow or title company typically holds the funds under your purchase agreement and escrow instructions.
What happens to my deposit if the seller defaults?
- If the seller cancels or breaches, your deposit is typically returned, and you may have other remedies under the contract or law.
How are deposit disputes resolved in escrow?
- Escrow will hold funds until both parties agree in writing or a court or arbitration order directs disbursement, as outlined in your contract.
