Earnest money: how much and when
How earnest money works, when you get it back, and when you do not.
What earnest money is
Earnest money is a good-faith deposit that shows the seller you are serious about buying their home. In Virginia, typical earnest money is 1-3% of the purchase price. It is held in escrow by the title company or closing attorney until closing.
When it is due
Your contract specifies when earnest money is due, typically 3-5 business days after ratification. You can pay by personal check, cashier's check, or wire transfer. Missing this deadline can put your contract at risk.
Getting it back
If you terminate the contract within an active contingency period, you typically receive your earnest money back. If you back out after contingencies expire without a valid contractual reason, the seller may be entitled to keep your deposit.
At closing
Your earnest money is applied to your closing costs or down payment. It is not an additional cost; it is money you have already put toward the purchase.
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