How much earnest money should I put down on a Los Angeles home?

Answered by Ken Sisson Reviewed November 4, 2026 Applies to Los Angeles, CA

Short answer

There is no fixed amount, but an initial deposit of about 3% of the purchase price is a common starting point in Los Angeles, and the amount is negotiable. The deposit goes to escrow, usually within a few days of acceptance, and is applied to your down payment and closing costs. What matters most is understanding when you could lose it, which depends on your contingencies and the contract's liquidated damages clause.

From Ken's experience

The topic of how much your earnest money deposit should be in Los Angeles is a negotiable aspect of an offer to purchase a home. Far less important than the price you’re offering, or other terms of your offer, but, still, a negotiable aspect.
Customarily, throughout Los Angeles, we see 3% being the amount of the earnest money deposit being offered. The earnest money, most simply put, is the buyer’s “skin in the game” so to speak, and is protected by the contingencies that the buyer has going into the contract.
As a negotiable term, I’ve seen earnest money deposits be both lower and higher than 3%. While most transactions that I’ve worked on are at 3%, sometimes a prospective buyer is short on liquidity when the offer is being made and will go in with 1% or 2%, or even a flat $5,000 or $10,000 number, offering an increased deposit by the proposed date of specific contingency removal. Likewise, I’ve seen 5%, or higher, in earnest money deposits offered in situations where a prospective buyer really loves the house and wants to make their offer stand out among multiple offers.
It all really depends on the scenario, but it is, bottom line, negotiable. Most people stick to the customary amount, though, in order to not deviate from the “norm” and have it look like maybe there’s something wrong with their offer.

Ken Sisson, Studio City and Sherman Oaks real estate broker

What earnest money is

Earnest money, called the initial deposit in most California purchase contracts, shows the seller you are committed. It is held by the escrow company, not the seller, and is credited toward your purchase at closing. The contract sets the amount and the deadline for delivering it, which is often within three business days of acceptance.

How much to offer

About 3% is a common starting point in Los Angeles, but it is not a rule.
A larger deposit can strengthen an offer when there is competition, because it signals that you are less likely to walk away.
A smaller deposit may be accepted when a home has been on the market a while or the seller cares more about price or timing.
Some contracts add a second deposit after contingencies are removed. Ask whether that fits your situation.

The amount should be money you can commit for the length of escrow, separate from what you need for the rest of your down payment and closing costs.

When your deposit is protected

Contingencies give you a set period to cancel for specific reasons and recover the deposit, typically for inspections, the appraisal, financing and review of disclosures and the title report. The standard California contract gives buyers a fixed number of days for each, and the deadlines can be negotiated. If you cancel properly within a contingency period, the deposit is normally returned, less certain escrow fees.

When it can be at risk

Once you remove a contingency, you generally can no longer cancel for that reason. If you then fail to close without another valid reason, the seller may claim the deposit.

Many California contracts include a liquidated damages clause that both parties initial. For a home the buyer intends to live in with one to four units, state law caps the amount the seller can keep under that clause at 3% of the purchase price, and any excess is returned. Without the clause, the seller would have to prove actual damages instead. Read this section carefully before you initial it.

Getting it back

The escrow company releases the deposit only with signed instructions from both buyer and seller, or by a court or arbitration decision. California law allows penalties when a party refuses in bad faith to sign a release.

Protect yourself from wire fraud

Criminals target real estate deposits with fake emails that change wiring instructions. Confirm the escrow company’s instructions by calling a phone number you looked up yourself, not one in an email, before sending money.

Questions to ask before you offer

How competitive is this home, and what deposit would make my offer credible?
What are my contingency periods, and when will I be expected to remove them?
Is there a liquidated damages clause, and should I initial it?
When and how do I deliver the deposit, and how will I verify the wiring instructions?

Who can help with this decision

Ken Sisson

Potential fit as a buyer's agent

This question is about evaluating and negotiating a purchase. A buyer's agent represents your interests in that decision.

Why Ken for this situation

Writes UpListed's buyer-side analysis for Studio City and Sherman Oaks, including how to evaluate reduced-price homes

“We literally just got the keys to our new home and I am more than happy to fully recommend Ken as a realtor. We are first time home buyers and he made this process easy every step of the way, always making sure we knew what was happening…”

Abigail McLaughlin, buyer client · Google · May 2026

Covers Studio City, Sherman Oaks, Los Angeles · Real Estate Broker, DRE 01292247 · Ken Sisson provides real estate services through Christie's International Real Estate Southern California

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Disclosure: Ken Sisson is UpListed's founding contributor. Recommendations are not paid placements.