The C.A.R. RPA default is 3 days after acceptance for the initial deposit to reach escrow. What counts is funds received by the escrow holder, not funds sent. The deposit stays generally refundable while the relevant contingencies are still in place, and becomes exposed after they are removed.
California buyers routinely wire twenty or thirty thousand dollars into escrow within seventy-two hours of an accepted offer, and then spend the next month unclear on the conditions under which they would get it back.
The answer is more protective than most people assume, right up until the moment it isn't.
The deadline itself
Three days from acceptance, and the operative word is received. A wire initiated on day three that lands on day four is a wire that landed on day four. Banks hold, wire cutoffs are earlier than people think, and a Friday acceptance in practice means Monday money.
The exact wording around business days versus calendar days on this particular item has moved across form revisions, so it is one worth reading on the copy you actually signed rather than reciting from memory.
Missing it is not fatal in the way missing it feels. Late deposit is a performance failure and the seller's remedy is a notice to buyer to perform — the same two-day mechanism that governs everything else. It is a bad look and a recoverable one. What it should never be is a surprise, because it is the earliest date in the file and the easiest one to hit.
The wire fraud window. These first three days are the highest-risk moment in the transaction for wire fraud, because a large sum is moving fast, to a party the buyer has never dealt with, on instructions delivered by email. Verify wiring instructions by phone using a number obtained independently — not the number in the email. This is the one deadline where moving fast and moving carefully genuinely conflict.
How much
The RPA leaves the amount blank. It is whatever the parties agree, and California norms have settled into roughly 1 to 3 percent of the purchase price, with 3 percent common in competitive markets and higher figures occasionally used to signal seriousness.
That signal has a cost worth naming. Depositing above 3 percent buys no additional legal protection — it only increases the amount sitting in the disputed pile if things go wrong. A larger deposit is a competitive decision, not a contractual requirement, and it should be made with that framing rather than as a reflex.
The three states of the deposit
Where the money stands
Same dollars, three very different legal positions.
Days 1–17
Contingencies active — generally refundable
A buyer who cancels for a reason the contract permits while a relevant contingency is in force is normally entitled to the deposit back. Failed inspection, low appraisal, loan denial, title problems, unsatisfactory HOA documents.
The removal window
Partial removal — partial exposure
Each removal narrows the exits. A buyer who has removed inspection but holds the loan contingency can still cancel on financing and not on condition. This is why removal is item by item rather than all at once.
After removal
All contingencies removed — exposed
The buyer no longer holds a contractual right to cancel. Failing to close from here is where liquidated damages enters the conversation, and where the deposit stops being the buyer's money in any practical sense.
What liquidated damages actually says
The commonly repeated version is that California caps the seller's recovery at 3 percent of the purchase price. That is close enough to be useful and wrong enough to matter.
Civil Code section 1675 sets a presumption in both directions. An amount at or below 3 percent is presumed reasonable, and the buyer bears the burden of showing it is not. An amount above 3 percent is presumed invalid, and the seller bears the burden of showing it is reasonable. Courts weigh the circumstances existing when the contract was made, and also what the property subsequently sold for if it resold within six months — a seller who resold higher has a harder argument.
Section 1677 adds a formality gate that gets overlooked constantly: the liquidated damages provision must be separately signed or initialed and set in the required type to be enforceable at all. A real share of California deposit disputes turn on whether that box was ever initialed, which is a good reason to check it at signing rather than discovering it in a dispute.
| Amount | Presumption | Who carries the burden |
|---|---|---|
| At or under 3% | Presumed reasonable | Buyer must show it is unreasonable |
| Over 3% | Presumed invalid | Seller must show it is reasonable |
And escrow does not just hand it over
Cancelling the contract and releasing the deposit are two separate acts. A party can cancel unilaterally in the circumstances the contract allows; disbursing the money generally requires mutual written instruction to the escrow holder. Which is why deposit disputes sit in escrow for months rather than resolving in a week, and why the practical answer to "can they keep my deposit" is usually "not without your signature or a judgment."
Common questions
When is the earnest money deposit due?
Within 3 days after acceptance by default, measured by funds received at escrow rather than funds sent. Check the business-day wording on your specific form revision.
How much earnest money is typical in California?
1 to 3 percent of the purchase price, with 3 percent common in competitive markets. The RPA sets no amount. Going above 3 percent adds risk without adding protection.
Is the deposit refundable?
Generally yes while a relevant contingency is active and the buyer cancels for a permitted reason. Exposure begins once contingencies are removed.
What happens if the deposit is late?
The seller can serve a notice to buyer to perform, which runs at least two days before they can exercise a right to cancel. Late is recoverable; silent is not.
Is 3 percent a hard cap?
No, it is a burden-shifting presumption under Civil Code section 1675. Section 1677 also requires the clause to be initialed and properly formatted to be enforceable.
Can escrow release the deposit without the buyer's agreement?
Generally not. Escrow holders typically require mutual written instruction to disburse a disputed deposit.