Earnest Money in Virginia: How Much, Who Holds It and When You Get It Back
Daniel ParkNo. 125
Updated
Key takeaways
- Earnest money is a good-faith deposit made after your offer is accepted.
- It’s held in escrow, usually by the settlement company or a brokerage, and credited toward your costs at closing.
- Contingencies in your contract determine when you can get it back if the deal ends.
- A larger deposit can strengthen an offer, but only offer what you can afford to risk.
When a seller accepts your offer, you’ll send an earnest money deposit. It tells the seller you’re committed, and it gets applied to your down payment or closing costs at settlement.
How much to offer
There’s no set amount. In Northern Virginia, deposits commonly range from about 1% to 3% of the price, and sometimes more in competitive situations. Your agent will suggest an amount based on the home and the competition.
Who holds it
The contract names the escrow agent, often the settlement company. Funds are deposited into an escrow account within the time the contract and Virginia rules require.
When you can get it back
| Situation | Deposit usually |
|---|---|
| You cancel within an inspection, financing or appraisal contingency, following its terms | Returned to you |
| You cancel during the HOA or condo document review period | Returned to you |
| You back out without a contract right to cancel | May go to the seller |
| The deal closes | Credited toward your costs |
Daniel’s tip: Put every contingency deadline on your calendar the day your contract is ratified. Most deposit disputes come from missed dates, not bad intentions.
Learn how contingencies protect you.
Frequently asked questions
Can I pay earnest money by wire?
Often, yes. Always call the escrow agent at a number you already know to confirm wiring instructions. Wire fraud is real.
Is earnest money the same as a down payment?
No, but it’s applied toward your down payment or closing costs at settlement.
Filed under Buying a Home
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