Buying in Greene County comes with a key decision early in your offer: how much earnest money to put down. It can feel like a lot to sort out, especially if this is your first purchase or you are relocating to Central Virginia. The good news is that once you understand how deposits work here, you can use them to strengthen your offer while protecting your interests. This guide explains what earnest money is in Virginia, who holds it, when it is refundable, and typical amounts in the Charlottesville area so you can move forward with confidence. Let’s dive in.
What earnest money is
Earnest money is a deposit you provide with a signed purchase agreement to show you intend to close. It signals commitment and gives the seller confidence in your offer. If you go to closing, the earnest money is credited to your purchase price or closing costs. If you do not close, the contract controls what happens next.
Virginia’s due diligence fee vs. earnest money
In many Virginia contracts you will see two terms: earnest money and a due diligence fee. They are not the same. Earnest money is typically refundable if you cancel within the contract’s contingencies and deadlines. A due diligence fee, when used, is paid to the seller for the right to inspect and decide during an agreed period and is often nonrefundable once you proceed past that period.
The exact rules depend on the contract form and what you negotiate. Read the agreement language carefully so you know which funds are refundable and when.
Who holds your deposit locally
In Greene County and the Charlottesville area, your deposit is usually held by the title or settlement company named in your contract. Sometimes a brokerage trust account or a mutually agreed escrow agent holds it. Your purchase agreement should name the escrow holder and include delivery instructions.
You typically deliver earnest money with your signed offer or within a short period after everyone signs. Plan to send funds promptly and keep a receipt or written confirmation from the escrow agent.
How escrow works from contract to closing
Once delivered, the funds stay in a trust or escrow account until closing. At closing, the earnest money is applied to your costs or the purchase price. If a deal ends early, funds are released according to the contract or a written agreement. If there is a disagreement, escrow is often held until the parties sign a release or a dispute process in the contract resolves things.
When earnest money is refundable
Refunds depend on your contract and whether you act within the timelines. Here are common protections buyers rely on when handled properly:
Common contingencies that allow a refund
- Financing contingency if you cannot obtain your loan and you give required notices on time.
- Inspection contingency or a due diligence period that lets you cancel within the window stated in the contract.
- Appraisal contingency when the property does not appraise at the agreed price and you terminate within the deadline.
- Title contingency when the seller cannot deliver marketable title as required and you end the contract as allowed.
- Sale-of-home contingency if it is included and your home does not sell by the stated date.
- Other contract-specific items like HOA document review, survey, permit, or zoning contingencies.
When refunds are unlikely
- You default by failing to close without a contractual right to terminate.
- You waived a contingency and try to cancel for reasons that contingency would have covered.
- You missed a deadline or did not provide required written notice before the deadline.
Steps to protect your refund rights
- Track every deadline and send termination notices in writing before the cutoff.
- Keep documentation, including lender letters, inspection reports, and escrow receipts.
- If something is unclear, loop in your agent early and consider speaking with a real estate attorney so you do not miss important dates.
How much earnest money to offer in Greene County
Local customs vary by price and competition, but these ranges are typical in the Charlottesville and Central Virginia market, including Greene County:
Typical ranges
- Lower-competition or lower-price listings: about $500 to $2,500.
- Median-priced homes: often $2,000 to $5,000.
- Higher-priced homes: many buyers use about 1% to 2% of the purchase price.
- Multiple-offer situations: some buyers go bigger to signal strength, such as 3% or more or flat amounts like $10,000 or higher depending on the home and competition.
Sellers often value a larger nonrefundable due diligence fee (when used) because it compensates them if you walk away during that period. Decide how much to allocate to earnest money versus a due diligence fee with your agent based on risk and competitiveness.
Quick local examples
- Around $350,000 in Greene County with a moderate level of competition: an earnest deposit of about $3,000 to $5,000 is common, and you might consider a due diligence fee near $2,000 with a 7 to 10 day inspection window.
- Around $600,000 in a competing-offer scenario: many buyers consider 1% to 2% earnest money (about $6,000 to $12,000) and sometimes a larger nonrefundable due diligence fee to stand out.
What sellers look for beyond the deposit
- Due diligence fee amount and whether it is nonrefundable.
- Shorter inspection or due diligence periods.
- Financing strength, including a solid preapproval and proof of funds to cover the deposit and closing.
- How you handle appraisal risk, including any gap coverage you can support.
- Closing date and flexibility.
- Whether you waived or limited certain contingencies (know the risks before you do).
Offer strategy for Greene County buyers
Your deposit is one lever in a larger offer strategy. Start by clarifying how competitive the property is and what matters most to the seller. You can often balance risk and strength by keeping a meaningful earnest deposit while tailoring timelines and certainty around finance and appraisal. When appropriate, a due diligence fee can show commitment, but be sure you are comfortable with the nonrefundable nature once the period passes.
If you consider shrinking or waiving contingencies, weigh that decision carefully. Confirm your lender timeline, know your inspection priorities, and set an appraisal plan you can support. The goal is to win the home while keeping clear paths to exit if something critical does not line up.
Checklist before you send funds
- Confirm who will hold escrow and how they want to receive funds (check, wire, or electronic transfer).
- Get clear delivery instructions and ask for a receipt or written confirmation once deposited.
- Review contingency deadlines and how to send notices if you need to cancel.
- Prepare proof of funds for the deposit if the seller requests it.
- Decide whether to include a due diligence fee and how it relates to your earnest money.
- If changing standard protections or timelines, talk through risks with your agent and consider legal advice if needed.
What happens if there is a dispute
If the seller claims you defaulted and will not release the deposit, common outcomes include a mutual written release, escrow holding the funds until the dispute clause in your contract is followed, or a formal dispute process such as arbitration or court. Review your purchase agreement so you know the steps and who must sign to release funds. The goal is to resolve it in writing as quickly as possible so you can move on with clarity.
Local guidance when you need it
Every Virginia contract has important timelines and small differences that matter. A focused local plan helps you make a strong first impression with your offer while protecting your deposit rights. If you want help reading your contract, balancing your deposit with a due diligence fee, or shaping a winning offer in Greene County or the wider Charlottesville area, let’s talk.
Have questions or want a second set of eyes on your offer strategy? Reach out to Patricia Irby for clear, client-first guidance rooted in local experience. Let’s connect over coffee — schedule a free consultation.
FAQs
What is earnest money in a Virginia home purchase?
- It is a good-faith deposit credited to you at closing that can be at risk if you default, with refund rules set by your contract and its deadlines.
Who holds earnest money in Greene County, VA?
- Most often a title or settlement company named in your contract holds it, though a brokerage trust account or other agreed escrow agent may be used.
When is earnest money refundable in Virginia?
- It is typically refundable when you cancel under a valid contingency such as financing, inspection, appraisal, or title, and you give written notice on time.
How much earnest money should I offer in Greene County?
- Typical ranges are about $500 to $2,500 for lower-competition homes, $2,000 to $5,000 for many median-priced homes, and about 1% to 2% in higher price points.
What if my loan is denied after I make a deposit?
- If your contract includes a financing contingency and you follow the notice rules and timelines, the earnest money is usually refundable.
Can the seller keep my deposit after inspection?
- If you cancel within the inspection or due diligence period per the contract, the earnest money is generally refundable, but it is at risk if you miss the deadline or waived the protection.
