In Washington, what is the cap on the amount of earnest money a buyer forfeits upon breach, according to the standard purchase and sale agreement?

In Washington, the standard purchase and sale agreement typically stipulates that in the event a buyer breaches the contract, the maximum amount they could forfeit as earnest money is capped at 5% of the sales price. This provision is designed to provide a clear framework for both buyers and sellers regarding the consequences of a breach, promoting transparency and fair practice in real estate transactions.

This 5% cap means that if a buyer defaults, they won't lose more than this specified percentage of the total sales price as a penalty, which serves to protect buyers from excessive financial loss while also giving sellers a level of assurance regarding the earnest money they may be entitled to retain. It helps maintain balance in transactions and encourages buyers to fulfill their contractual obligations while providing sellers with a reasonable expectation of recouping potential losses.

Understanding this cap is crucial for real estate professionals in Washington when advising clients or drafting purchase agreements, as it defines the limits of liability regarding earnest money forfeiture in the event of a breach.