What Is the Initial Deposit When I Buy a House in California?

The initial deposit is the money you put down once your offer on a home is accepted, typically 1% to 3% of the price. You may have heard it called earnest money. Here in California, we call it the initial deposit, and it's one of the first moments a home starts to feel like yours.

Audrey Schmierer is a REALTOR® with Keller Williams Central Valley in Lodi, CA, helping first-time buyers and downsizers buy and sell with confidence. I'm Audrey Schmierer, and I love the day a first-time buyer's offer is accepted and this step becomes real.

A few myths make the deposit sound bigger and scarier than it is. Here's what's true.

🙅 Myth: the deposit is paid to the seller. It is sent straight to the title company, which handles your closing together with escrow.

➕ Myth: it's extra money on top of the price. It counts toward your purchase, so it's a head start on the home, not an added cost.

💪 Myth: the smallest deposit is always the smartest. A higher deposit shows the seller you're serious about their home, and that can make your offer the one they choose.

📐 Myth: there's one set amount. Every offer is different, so we choose your amount together each time.

🏦 Spending the money before you find the home. Once you start touring, keep your deposit set aside in savings so it's ready the day your offer is accepted. Your lender can tell you what else to keep on hand.

Here's a made-up example. Say you've found a charming older home in Downtown Lodi, and it's your very first offer. For every $100,000 of price, the typical range works out to $1,000 to $3,000, so we'd find the spot in that range that feels comfortable for you and still helps your offer stand out. For the rest of your offer, read how to make a strong offer on your first home. Audrey Schmierer is a REALTOR® with Keller Williams Central Valley in Lodi, CA, helping first-time buyers and downsizers buy and sell with confidence.

It's the first piece of your purchase, and it waits with the title company, not the seller.

Start with how I help first-time buyers and what pre-approval means, then see every step of how buying a home works with me, or call, text or email me to get started. Audrey Schmierer is a REALTOR® with Keller Williams Central Valley in Lodi, CA, helping first-time buyers and downsizers buy and sell with confidence.

This article describes how I generally help buyers. It isn't legal, tax or lending advice, and every purchase has its own details.