If you’re buying a home in Virginia, you’ll be asked to make an earnest money deposit soon after your offer is accepted. And if you’re like most first-time buyers, your first question might be:
“Wait… I have to send thousands of dollars already?”
Here’s what it actually means — and why it matters.
What Is an Earnest Money Deposit?
The earnest money deposit (or EMD) is a good faith payment that shows you’re serious about buying the home. It’s usually 1–2% of the purchase price and is due a few business days after your contract is signed (this exact timing is written into your contract).
In most Virginia transactions — especially in Harrisonburg and Rockingham County — the earnest money deposit is held by the real estate company representing the buyer. It stays in a separate escrow account while the deal moves forward: inspections, financing, title work, and so on.
When you close, that deposit gets applied toward your down payment or closing costs. If the deal doesn’t close, what happens to the money depends on the terms of the contract.
Why It’s a Big Deal
One of the biggest misunderstandings buyers have is how protected the earnest money actually is — and when it can (or can’t) be returned.
In Virginia, that money can only be released if:
- The buyer and seller agree in writing, or
- A court order is issued, or
- The contract clearly spells out the process
You can’t just call and ask for it back. And you can’t walk away from a contract just because you change your mind. To get your deposit refunded, you need a valid reason listed in the contract — like a failed inspection or loan denial — and the contingency must give you the right to cancel in that situation, involving your earnest money deposit.
What Happens If You Miss the Deadline?
The earnest money deadline is a real part of the contract — not a soft suggestion. If you don’t deliver your deposit on time, you’re in default. That can jeopardize your ability to purchase the property if the seller chooses to enforce the contract strictly. Missing this deadline can seriously affect your earnest money deposit terms.
This is why your agent should make the timing crystal clear — and why it’s one of the first things to prioritize after your offer is accepted.
Final Tips for Buyers
- Confirm exactly when and where your deposit is due
- Know who’s holding it — typically your agent’s brokerage
- Understand what protects your deposit — and what puts it at risk
- Stick to every contract deadline
Bottom Line
The earnest money deposit isn’t just a formality. It’s a serious part of your offer — and your contract. Know what an earnest money deposit is, when it’s due, and how it protects you (or doesn’t).
Understanding this early makes the entire closing process smoother, safer, and less stressful.