What Is Earnest Money In Nevada Real Estate?

Thinking about writing a sizable check the moment your offer is accepted? That upfront money is earnest money, and it plays a key role in how homes get bought and sold in Reno. If you understand how it works, you can write a stronger offer and protect your deposit if plans change. In this guide, you’ll learn what earnest money is, how it’s handled in Nevada, what’s typical in Washoe County, and how to keep your funds safe. Let’s dive in.

Earnest money, defined

Earnest money is a good‑faith deposit you put down when you and the seller sign the purchase agreement. It shows serious intent and financial commitment. It is not an extra fee. At closing, your deposit is usually credited toward your down payment and closing costs.

The deposit also creates a buffer if someone breaches the contract. If the buyer defaults without an allowed reason, the seller may be able to keep the deposit. If the deal ends under a valid contingency, the buyer can often get the deposit back.

How it works in Nevada

Most Nevada transactions use standard purchase agreements that spell out the deposit amount, where it goes, when it is due, and when it can be released. You and the seller agree to these terms when you sign the contract.

Here is the general flow:

• You and the seller sign a purchase agreement that includes deposit instructions.
• You deliver the deposit by check, cashier’s check, or wire transfer within the deadline in the contract.
• A neutral party holds the funds in an escrow or trust account until closing or termination.
• At closing, the deposit is credited to you. If the deal ends early, the deposit is released or refunded based on the contract.

Who holds the deposit

In Reno and throughout Nevada, deposits are commonly held by a licensed title or escrow company. Sometimes a buyer’s or listing broker holds the funds in a trust account if the contract allows it. Neutral escrow with a licensed title company is widely used because it keeps funds secure and avoids conflicts.

When you must deposit

Deposit timing is set by your contract. Some agreements say “within X business days of acceptance.” Others use different language. There is no single statewide rule that applies to every deal. To avoid surprises, follow your exact contract deadline and get written confirmation when the funds are received.

Typical amounts in Reno

In the Reno and greater Washoe County market, you often see earnest money in the range of about 1 percent to 3 percent of the purchase price. Competitive situations can push deposits higher, and cash buyers sometimes put more down to strengthen their offer. The right number depends on price point, market conditions, and your risk tolerance.

Examples:

• On a $400,000 home: 1 percent equals $4,000 and 2 percent equals $8,000.
• On a $600,000 home: 1 percent equals $6,000 and 2 percent equals $12,000.

What affects your deposit size

• Market conditions: Hotter markets may call for larger deposits or tighter timelines.
• Financing type: Conventional, VA, FHA, or cash can influence the amount.
• Property condition: More unknowns can favor standard contingency periods and modest deposits.
• Seller preferences: Some sellers ask for larger deposits or shorter contingency windows.

When you can get it back

Your right to a refund usually depends on contingencies and deadlines in your contract. Common refund scenarios include:

• Inspection contingency: You cancel within the inspection period per the contract.
• Financing contingency: You are unable to obtain financing under agreed terms and you give proper notice.
• Appraisal contingency: The appraisal comes in below price and you cancel correctly.
• Title contingency: Clear or insurable title cannot be provided.
• Sale‑of‑home contingency: If included, you do not sell your current home in time and you follow the notice rules.

To preserve refund rights, follow notice procedures exactly. Use the forms and timelines in your agreement and keep records of all communications.

When you could lose it

Sellers may be entitled to keep the deposit if a buyer breaches the contract without a valid contingency or fails to close when required. That said, deposits are not automatically forfeited. The outcome depends on the exact language in your contract, dispute‑resolution provisions, and applicable Nevada rules. Sellers often need to follow the contract’s steps and are expected to mitigate damages, such as attempting to resell the property.

How disputes are handled

If both parties agree in writing, escrow can release the deposit accordingly. If there is a dispute, many contracts require mediation or arbitration. Escrow agents often hold funds until they receive a mutual release or a court order. In some cases, the escrow holder may file an interpleader action so a court can decide who gets the funds.

Buyer checklist: protect your deposit

• Read your signed contract and calendar every deadline.
• Confirm where to deposit and verify wiring instructions by phone using a known number from the title company. Do not rely only on email.
• Use inspection, appraisal, financing, and title contingencies that match your risk tolerance.
• Send all notices in the form required by the contract and keep copies.
• Get written confirmation that escrow received and posted your funds.

Seller checklist: set clear terms

• Specify the deposit amount, where it will be held, and when it is due.
• Require firm timelines for contingency removal and closing.
• Consider whether “time is of the essence” or liquidated damages language is appropriate for your situation.
• Ask for proof that funds have cleared into the escrow or trust account.

Wire safety in Nevada closings

Wire fraud is a real risk in real estate. Before sending any funds, call the title company at a phone number you know and verify the instructions. Avoid clicking on last‑minute emailed wiring changes. If you suspect fraud after sending a wire, contact your bank and the title company right away. Time matters.

Reno market strategy tips

• In a softer market: You may negotiate a smaller deposit or longer contingency timelines, especially if your offer is strong in other ways.
• In a competitive market: A larger deposit or shorter contingency windows can help, as long as they match your comfort with risk.
• Cash offers: Larger deposits and streamlined contingencies can be compelling, but keep inspection and title protections you need.

Quick math for planning

A simple way to plan is to estimate 1 percent to 3 percent of the purchase price, then adjust based on market conditions and your financing. Remember that this money is usually credited back to you at closing. Keep your receipt from escrow and bring it to signing so your lender and closing team can apply it correctly.

Ready to tailor these steps to your purchase or sale in Reno? Reach out for a conversation that balances strong offer strategy with risk‑aware protections.

If you want a high‑touch plan for earnest money, contract timelines, and closing logistics, our team is here to help. Schedule a Concierge Consultation with Unknown Company to get started.

FAQs

How much earnest money should I offer in Reno?

• Many buyers offer about 1 percent to 3 percent of the purchase price, adjusted for competitiveness and risk tolerance.

When is the earnest money deposit due in Nevada?

• Your purchase agreement sets the deadline, often stated as a certain number of business days after acceptance.

Can I get my earnest money back after an inspection?

• If your contract includes an inspection contingency and you cancel within the inspection window using proper notice, a refund is commonly available.

What happens to my deposit if the seller accepts another offer?

• If your contract is terminated without your breach, deposits are typically returned, subject to the release terms in your agreement.

Can the seller keep my deposit if they resell the home quickly?

• Not automatically. Contract terms, dispute‑resolution steps, and mitigation of damages matter. Outcomes depend on the agreement and applicable rules.

Is earnest money the same as a nonrefundable option fee?

• No. Earnest money is usually refundable under contract contingencies, while nonrefundable fees or option payments are separate and only used when agreed in writing.

What should I do if I suspect wire fraud after sending my deposit?

• Contact your bank and the title company immediately and report the incident. Speed is critical to attempt to recall funds.