Building in Jericho Heights or elsewhere in Richland’s 99352? Your earnest money deposit is one of the first big decisions you’ll make, and it sets the tone for the entire build. You want to protect your funds, keep your timeline on track, and avoid surprises at closing. This guide explains how earnest money works with new construction, what’s typical locally, and the key terms to watch in your contract so you can move forward with confidence. Let’s dive in.
What earnest money does with new builds
Earnest money is a good‑faith deposit that shows you are committed to buying. With new construction, it also helps the builder cover administrative costs and holds your lot and plan while construction moves forward. In Washington, deposits are typically held by a neutral escrow or title company, or by the builder’s trust account as the contract specifies. Your Purchase and Sale Agreement is the final word on how funds are handled and when they become nonrefundable.
You may encounter several types of deposits in a new-build purchase:
- Lot reservation deposit: smaller sum to temporarily reserve a lot while paperwork is prepared.
- Earnest money at contract: larger deposit when you sign the Purchase and Sale Agreement.
- Design center or upgrade deposits: funds for selections or custom features after contract.
- Additional milestone deposits: some builders collect staged deposits tied to construction phases.
Deposit structure and timelines in 99352
Builders in Richland use a variety of contract templates. Many follow Pacific Northwest norms, but each community and builder is different, so confirm specifics.
Here is what you will typically see:
- Lot reservation: paid immediately to hold a lot, often with a short refund window of a few days.
- Earnest money at contract: due at signing or within a short period, commonly 3 to 7 business days.
- Design selections: usually scheduled within 7 to 21 days after contract, with deposits due when you confirm choices.
- Milestone deposits: some contracts schedule additional deposits at stages such as foundation or framing.
- Closing: your earnest money is applied to the purchase price, and any upgrade charges are reconciled per the contract.
How much to budget
Amounts vary by builder, price point, and market conditions. New-construction earnest money is often larger than for resale because builders are holding a lot and allocating resources. Nationally, low-percentage deposits in the 1 to 3 percent range are common, with higher amounts in competitive settings.
Illustrative examples you may see in Richland and Jericho Heights:
- Lot reservation: typically 1,000 to 5,000 dollars, often refundable for a short window.
- Earnest money at contract: commonly 2,500 to 20,000 dollars, scaled by builder and price point.
- Design center or upgrade deposits: 1,000 to 10,000 dollars or more, often nonrefundable once selections are locked.
These are examples, not guarantees. Always verify exact amounts and refund terms in the Purchase and Sale Agreement and any reservation or selection documents.
Refunds, cancellations, and contingencies
Your contract defines when funds are refundable, what counts as default, and how disputes are handled. Read these sections closely before you sign.
Buyer protections to look for
- Financing contingency: allows you to cancel if you cannot obtain final loan approval by a deadline.
- Appraisal contingency: addresses what happens if the appraisal is below the contract price.
- Inspection or walk‑through provisions: builder contracts often limit general inspections; confirm what is allowed and how defects are handled.
- Title and HOA review: gives you time to review title exceptions and community CC&Rs.
- Lot or plan timing: helpful when builds depend on permitting, grading, or phased releases.
If you cancel
- If you cancel under a valid, timely contingency, your deposit should be returned per the contract.
- A mutual written release can also return funds if both sides agree.
- If you default without a contractual basis, the builder may keep your earnest money as liquidated damages or pursue other remedies stated in the contract.
- Upgrade or design deposits are often nonrefundable once selections are confirmed.
If the builder fails to perform
- If the builder misses contractual obligations, you may be able to terminate and recover your deposit, subject to the agreement.
- Most builder contracts include delay or force majeure provisions for weather, permits, or supply issues. Delays alone do not always trigger a refund unless a deadline or termination right is reached.
Disputes and escrow release
- Deposits typically remain in escrow until both parties sign a release or a dispute is resolved by mediation, arbitration, or court order.
- Keep documentation and follow the notice and deadline requirements exactly to protect your rights.
Local tips for Richland and Jericho Heights
Builders in the Tri‑Cities use both association forms and in‑house purchase agreements. Smaller local builders can be flexible on deposit structure, though they may request higher deposits to reduce lot‑hold risk. Communities such as Jericho Heights may have HOA initiation fees or infrastructure timelines that affect your selection windows or deposit schedules. Confirm these details in writing before you reserve a lot.
Using a neutral, licensed escrow or title company is common and provides standard accounting and escrow instructions. The Purchase and Sale Agreement usually names the escrow holder. You can request a different neutral company, subject to agreement by the parties.
Buyer checklist before you reserve
- Ask for the builder’s standard Purchase and Sale Agreement and any reservation form up front.
- Confirm deposit schedule and refund terms for the lot reservation, earnest money, design selections, and any milestone deposits.
- Verify who holds the funds and obtain contact details for the escrow or title company.
- Clarify contingencies, inspection rights, HOA document review, and all deadlines.
- Ask what happens to deposits if financing falls through, the appraisal is low, construction is delayed, or you change selections.
- Understand the policy for design and upgrade deposits and whether they are credited or refunded if you do not close.
- Review schedule estimates and allowed extensions for permits, weather, or materials.
- Look for liquidated damages language and other default remedies; have your agent or an attorney flag one‑sided clauses.
- Plan for inspections and walk‑throughs, including pre‑drywall and final punch‑list timing.
Questions to ask before you commit
- What is the difference between the lot reservation deposit and earnest money, and when is each due and refundable?
- Where will funds be held, and who is my contact at the escrow or title company?
- Which contingencies are allowed, and what are the deadlines to exercise them?
- Which deposits or fees are nonrefundable, and under what conditions?
- How are change orders and upgrades handled, including deposits and credits at closing?
- What is the policy for construction delays, and do delays give me the right to cancel and recover my deposit?
- Does the contract include a liquidated damages clause, and how much could the builder keep if I default?
Next steps
Your earnest money is both a commitment and a safeguard when it is structured correctly. If you are eyeing a lot in Jericho Heights or another 99352 community, get your deposit timeline and contingencies clear before you sign. That preparation will help you protect your funds and keep your build moving.
Have questions or want help reviewing a builder’s deposit schedule? Connect with Laura & Wes Hodges for local, hands‑on guidance from a team that navigates Tri‑Cities new construction every day.
FAQs
What is earnest money for a new build in Richland?
- It is a good‑faith deposit that shows commitment, holds your lot and plan, and is typically applied to your purchase price at closing as your contract specifies.
How much earnest money is typical for Jericho Heights builds?
- Examples often range from 2,500 to 20,000 dollars at contract, but amounts vary by builder and price; always confirm exact figures and refund terms in your agreement.
Who holds my earnest money deposit in Washington?
- Funds are commonly held by a neutral escrow or title company, or by the builder’s trust account, as written in the Purchase and Sale Agreement.
When is earnest money refundable on a new build?
- Refunds depend on the contract and deadlines; deposits are usually returned if you cancel under a valid contingency or a mutual release is signed.
What if the appraisal comes in low on my new‑construction home?
- Your contract’s appraisal contingency controls next steps; some builders require buyers to cover shortfalls, so review this section before you sign.
