[WSBARP] limit on Earnest Money.

[Craig Blackmon]

Craig, the parties can agree to earnest money in excess of 5%.  They
simply need to include language sufficient to support the liquidated
damages provision, as set forth in case law. I generally use something like:

"If Buyer were to breach this Agreement, Seller’s losses would be difficult
or impossible to ascertain. The earnest money constitutes “liquidated
damages” and is a reasonable estimate of Seller’s losses if Buyer breaches
this Agreement. As Seller’s only remedy upon Buyer’s breach, Buyer will
forfeit the Earnest Money, including that portion in excess of 5% of the
Purchase Price."

If anyone has experience in handling an EM dispute of >5%, and whether
forfeiture was enforceable, please share!

Craig
Craig Blackmon, Attorney at Law
<https://www.mywsba.org/PersonifyEbusiness/LegalDirectory/LegalProfile.aspx?Usr_ID=000000029240>
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Office/Cell: (206) 369-5949
On the blog: Changes to Title and the QCD
<https://seattlepropertylawyer.com/blog/quitclaim-deed-explained>
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On Mon, Oct 27, 2025 at 8:14 PM Tom Westbrook <tjw at w3net.net> wrote:

> Hey Craig, totally spit balling here, but can’t you have a separate
> earnest money agreement referenced in the P&SA that provides how the
> parties agree to handle the earnest money irregardless of statutory or case
> law, etc?
> Best Regards, Tom Westbrook
>
> Get Outlook for iOS <https://aka.ms/o0ukef>
> ------------------------------
> *From:* wsbarp-bounces at lists.wsbarppt.com <
> wsbarp-bounces at lists.wsbarppt.com> on behalf of Craig Gourley <
> craig at glgmail.com>
> *Sent:* Monday, October 27, 2025 5:34:55 PM
> *To:* WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
> *Subject:* [WSBARP] limit on Earnest Money.
>
>
> Listmates,   I understand the Earnest Money limitations contained in RCW
> 64. 04.005 and that earnest money outside of the 5% is controlled by case
> law.  I have a very large developer that is offering my client
> substantially more than the 5% as Earnest money and they have offered to
> waive the statutory limit.  Typically I would just restructure it as an
> partially an option payment but the developer is pushing back.  I thought I
> would consult the collective before diving into case law.    Any thoughts?
> Thanks!
>
>
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