Buying in Brea can move fast. When you find the right home, you want your offer to stand out and still keep your savings safe. Earnest money is a big part of that balance. In this guide, you will learn how much to deposit, when to pay it, which contingencies protect you, and what to do if a deal changes course. Let’s dive in.

Earnest money in Brea: quick facts

• Earnest money is your good‑faith deposit that is credited to your closing costs or down payment at closing.
• In Brea and much of Orange County, 1–3% of the purchase price is common. In multiple offers, buyers often go 3–5% or more to signal strength.
• Most deposits are due 24–72 hours after the seller accepts your offer. Confirm the deadline in your contract.
• Funds are usually held by a neutral escrow or title company until closing or cancellation under the contract.
• Typical escrow timelines in Southern California run 30–45 days, depending on your lender and the agreement.

What it is and who holds it

Earnest money shows the seller you intend to complete the purchase. In California, the purchase agreement controls how the deposit is handled. Many agents use California Association of Realtors forms, which spell out deposit terms, deadlines, and release conditions.

In most Brea transactions, you send the deposit to the escrow or title company that will handle closing. Less commonly, it can go to a broker’s regulated trust account if the contract instructs it. Either way, the holder keeps the funds in a neutral account and only releases them according to the written agreement and instructions.

How much should you put down in Brea?

Start with market context. In typical conditions, 1–3% is standard. If you are in a multiple‑offer situation, consider 3–5% or higher if you are comfortable and your cash allows it. A larger deposit can help your offer look more committed without changing the price.

Pick an amount that fits your risk tolerance and the home’s condition. If you plan to keep all contingencies at full length, a mid‑range deposit can be enough. If you will shorten contingency timelines, a higher deposit may reinforce your position. Align your deposit with your lender’s plan and how quickly you can access funds.

Timeline: from acceptance to closing

• Deposit delivery: Your initial earnest money is typically due 1–3 business days after mutual acceptance. Many Brea offers set a precise 24–72 hour window. Wire transfer is fastest, while a cashier’s check is a common alternative.
• Second deposit option: In competitive offers, some buyers use a split deposit. For example, an initial $5,000 at acceptance, then a second deposit within 7–10 days that brings the total to 2–3%.
• Contingency periods: Inspection windows commonly range 7–17 days. Loan contingencies often fall in the 17–21 day range, with the appraisal tied to that loan timeline. Confirm all periods in your contract and calendar them immediately.
• Escrow length: Plan for 30–45 days in Orange County unless you and your lender can close faster and the seller agrees.

At closing, escrow credits your deposit to your cash to close. If you cancel under a valid contingency and follow notice rules, the deposit is generally returned to you.

Contingencies that protect your deposit

Contingencies are your safety net. If you cancel within a valid contingency period and follow the contract’s procedures, your deposit is usually protected.

Loan contingency

• Protects you if your financing cannot be obtained by the deadline.
• Keep lender updates and denial letters if needed to document a contingency‑based cancellation.

Appraisal contingency

• Covers you if the property appraises below the purchase price and there is no agreement to adjust price or terms.
• Work with your agent and lender to time the appraisal early enough to make decisions without rushing.

Inspection contingency

• Allows you to inspect the home and request repairs or cancel within the window.
• Include general, pest, and any specialty inspections you need.

Title and HOA review

• Title review gives you time to verify clear title and assess any recorded items.
• If the property is in an HOA, you typically get a short period to review CC&Rs, budgets, reserves, litigation, and any special assessments.

Sale of buyer’s home and disclosures

• If you need to sell your current home first, a sale contingency can be used, although it is less common in tight markets.
• California also requires robust seller disclosures. Use your contingency period to review the Transfer Disclosure Statement, Natural Hazard Disclosure, and any special tax items like Mello‑Roos.

Local Brea considerations

• Insurance: Parts of Orange County face wildfire risk and changing insurance availability. Confirm insurability and premiums during your contingency period.
• Special taxes: Some newer areas have Mello‑Roos or other district taxes. Assess the long‑term cost before removing contingencies.
• HOA health: In condo and planned communities, review reserves and any litigation, since these can affect lending and value.

If a deal unravels: what happens to your deposit

If you close, your deposit is credited to you. If you cancel within a valid contingency and issue the correct written notice, escrow typically returns your funds. If you miss a deadline or cancel without a qualifying contingency, the seller may be entitled to keep the deposit as damages.

Many California purchase agreements include an optional liquidated damages clause. If elected, it can limit the seller’s remedy to keeping the earnest money specified in the contract rather than pursuing broader damages. Whether this clause applies depends on your signed agreement. Review it with your agent before you submit the offer.

If the parties disagree about releasing funds, escrow will usually hold the deposit until there is a written agreement, a court order, or instructions that resolve the dispute. Many contracts also require mediation or arbitration before litigation. Keep all reports, emails, and notices to support your position if a dispute arises.

Protect yourself from wire fraud

Wire fraud is a real risk in real estate. Before sending any money, call the escrow or title company using a phone number you look up independently. Confirm wire instructions by voice with a verified escrow officer. Never send funds to an individual seller or to an account name that does not match the escrow holder. Always get a receipt.

Offer playbook for Brea buyers

You can strengthen your offer without taking unnecessary risks. Use these approaches based on market conditions.

Competitive strategy

• Consider a total deposit closer to 3–5% if your budget allows.
• Deliver your initial deposit within 24–48 hours to signal readiness.
• Tighten, but do not eliminate, contingencies unless you are fully prepared. Coordinate timing with your lender and inspector.
• Use a split‑deposit structure to show commitment while managing cash flow.

Protective strategy

• Keep inspection at 10 business days to allow full investigation.
• Keep loan at 17–21 days unless your lender can commit earlier in writing.
• Avoid waiving appraisal unless you have reserves to bridge gaps comfortably.

Starter timeline template

• Initial deposit: within 24–72 hours of acceptance.
• Total earnest money: 1–3% in normal conditions; higher in bidding wars.
• Inspection: target 10 business days.
• Loan and appraisal: 17–21 days.
• Close of escrow: 30–45 days.

Buyer checklist: keep your deposit safe

• Confirm where the deposit goes and the exact due date in your offer.
• Verify wire instructions by phone and save confirmations and receipts.
• Calendar every contingency deadline on day one of escrow.
• Order inspections immediately and review disclosures as soon as received.
• Keep written records of all reports, lender updates, and notices.
• If you cancel, deliver the contract‑required cancellation in writing and confirm escrow’s receipt.
• Ask your agent to explain the liquidated damages clause before you sign.

The bottom line for Brea buyers

A well‑structured deposit can help you win the home you love while keeping your money protected. Set the right amount for the neighborhood, know your deadlines cold, and use contingencies wisely. With a clear plan and a responsive team, you can compete with confidence in Brea.

If you are planning a move in North Orange County, let’s map out a deposit and timeline that match your goals. Start the conversation with Jacob Abeelen today.

FAQs

How much earnest money is typical in Brea?

• In many Brea transactions, buyers put 1–3% of the price down. In multiple offers, 3–5% or more is common when buyers want to strengthen their position.

How fast do I need to deliver the deposit after acceptance?

• Many offers require delivery within 24–72 hours to escrow or a broker trust account, so confirm your exact deadline in the contract and plan funds in advance.

Can I get my earnest money back if the appraisal is low?

• If you have an appraisal contingency and cancel within the allowed period after a low appraisal, the deposit is usually returned according to the contract.

Who holds the earnest money in Orange County deals?

• Most deposits are held by a neutral escrow or title company, although some contracts direct funds to a listing broker’s regulated trust account.

What is a liquidated damages clause and why does it matter?

• If elected in the contract, it can limit the seller’s remedy to keeping the earnest money deposit rather than pursuing broader damages if the buyer defaults.

How can I avoid wire fraud when sending my deposit?

• Call the escrow company on a verified number to confirm wire instructions, send funds only to the named escrow holder, and keep written confirmations and receipts.