I just got an email back from my RE agent stating that it is becoming 'standard'. Here is her response when I asked why that much:
"I set the EMD (earnest money deposit) at $5000 because cash offers are required to have a $5000 EMD on all. This has become standard of late. It shows that you are serious with your offer and also that you are willing to show some risk. This EMD goes towards your final purchase. REO listings set the precedence on this practice and now I see it across the board on all cash offerings."
Anyone else in Calif. (or anywhere) running into this?