Buying in Henrico County comes with a key question: how much earnest money should you put down, and when can you get it back if plans change? It is normal to feel unsure about the right number and the rules. With a little local context and clear steps, you can make a strong offer without taking on unnecessary risk. In this guide, you will learn what earnest money is, typical amounts in Central Virginia, when it is refundable, how escrow works in Henrico, and how to structure your timelines. Let’s dive in.

What earnest money is

Earnest money, sometimes called a good-faith deposit, is money you give with your offer to show you are serious about buying. If you close, it is applied to your down payment or closing costs. It is not an extra fee.

This deposit gives the seller confidence in your offer. It also helps organize the deal by setting rules for refunds and forfeits in your purchase contract. The contract controls when your deposit is protected and when it could be at risk.

Typical amounts in Henrico

Customs vary with market conditions, price point, and your strategy. In many Central Virginia transactions, buyers put down about 1 to 3 percent of the purchase price. In balanced conditions around Henrico, you often see $1,000 to $5,000 or about 1 percent.

To picture it, on a $300,000 home, 1 percent is $3,000 and 2 percent is $6,000. On a $450,000 home, 1 percent is $4,500. In a fast seller’s market, larger deposits can help your offer stand out. In a slower market, a smaller deposit can be reasonable.

Local competition matters. When inventory is tight and days on market are low, sellers may expect higher deposits and faster timelines. When the market cools, buyers often keep more protections and use smaller deposits.

When your deposit is refundable

Your contract outlines the rules. In general, earnest money is protected while you are inside agreed contingency periods or if the seller breaches. Once contingencies are satisfied or waived, and you default later without contract grounds, you risk losing the deposit.

Common contingencies include:

• Inspection contingency. You can terminate within the inspection window per the contract. If you do it properly and on time, your earnest money is typically refunded.
• Financing contingency. If your loan is denied within the financing period and you follow notice rules, your deposit is usually protected.
• Appraisal contingency. If the appraisal is below the price and the contract provides an out, you may cancel or renegotiate without losing your deposit.
• Title and clearance items. These are less common for buyers to exercise but can apply if the contract includes them.

Timelines are negotiated. Many inspection periods run 7 to 14 days in practice, but the exact number is what you and the seller agree to. Your contract will also set a deposit deadline, often upon ratification or within a set number of business days. Missing a deadline can put you in breach, so mark dates carefully.

If you terminate properly within a contingency period, the escrow holder should refund your earnest money. If you waive a contingency or miss a deadline and default later, the seller may be entitled to keep the deposit as damages. If the parties disagree, the funds stay in escrow until you both sign a release or there is a court order or other resolution.

How escrow works in Henrico

The contract will name an escrow agent. In Henrico and the greater Richmond area, earnest money is often held by one of the following:

• The buyer’s or seller’s real estate brokerage in a broker trust account
• A local title or settlement company, or a closing attorney
• A lender or attorney if your contract specifies it

Deposit methods include certified check, personal check when allowed, or wire transfer for larger amounts. Some escrow holders also accept secure electronic payments. The key is to follow the exact instructions in your contract and meet the deposit deadline.

Virginia brokers, title companies, and settlement attorneys must follow strict rules for client trust funds. They maintain escrow accounts, keep records, and cannot release disputed funds without written agreement or a court order. Keep your own records too. Save a copy of your signed contract, the deposit instructions, and proof of deposit.

Protect yourself from wire fraud

Wire fraud continues to be a real risk. Take these steps before sending any money:

• Call the escrow holder using a verified phone number, not a number in an email, to confirm instructions.
• Confirm account details in person or through a known, trusted contact.
• Consider a certified check or in-person delivery if you are not comfortable wiring funds.

Offer strategy: choosing your deposit and timelines

Your earnest money should match your goals and risk tolerance. Here are common approaches we see around Henrico:

• Conservative approach. Put down $1,000 to $3,000 or about 0.5 to 1 percent. Keep standard inspection, appraisal, and financing protections. This limits exposure if you need to cancel within contingencies.
• Competitive approach. Offer 1 to 3 percent or more on the deposit and shorten deadlines where you are comfortable. This can strengthen your offer in multiple-offer situations but increases risk if you later default.
• All-cash buyers. Often use larger or faster deposits and may remove financing contingencies. This can be very attractive to sellers because it signals a high likelihood of closing.

Whatever your strategy, make sure it aligns with real market conditions. Current local reports on median prices, days on market, and inventory help decide how aggressive you need to be.

Timelines to lock in your offer

Confirm these items in writing in your contract:

• Earnest money due date, such as upon ratification or within a set number of business days
• Inspection window and the last day to deliver repair requests or a termination notice
• Loan application date and loan commitment date, if you are financing
• Appraisal contingency terms and how to handle a short appraisal
• Closing date and possession date
• The named escrow holder and exact deposit instructions

First-time buyer steps in Henrico

• Get preapproved and include your preapproval letter with your offer.
• Choose a deposit amount that fits local norms and your comfort level. Your agent should explain how it supports your overall offer.
• Keep standard contingency periods unless you have a clear reason to shorten them.
• Plan how you will deliver the deposit and keep proof of receipt.

Move-up buyer steps

• If you need to sell to buy, discuss a home sale contingency. It can affect seller acceptance and may require careful timing and deposit terms.
• Coordinate closing and possession dates across your sale and purchase to reduce moving stress.
• Maintain clear proof of deposits and contingency notices for both transactions.

A quick checklist before you deposit

• Read the contract section on earnest money, disbursement rules, and dispute steps.
• Verify the escrow holder and acceptable payment methods.
• Call to confirm wire instructions using a trusted phone number.
• Save your deposit confirmation and a copy of the executed contract.
• Track all contingency deadlines and notice requirements on your calendar.

Local perspective: making your offer stand out

In many Henrico neighborhoods, sellers value clarity, speed, and low risk. You can strengthen your position without overreaching by doing the basics well. Deliver the deposit on time, respond quickly during inspections, and keep communication clean and documented. A well-structured offer with realistic deadlines and a thoughtful deposit tells the seller you will close.

If you are deciding between deposit options, ask yourself two questions. How competitive is this property likely to be, and how comfortable are you if things do not go as planned? Your offer should reflect both.

Ready to tailor your strategy to a specific home or neighborhood in Henrico? Our team pairs calm, clear guidance with proven negotiation to help you protect your deposit while keeping your offer compelling.

Looking for help structuring your offer and timelines, start to finish? Reach out to Unknown Company for a thoughtful, concierge-level plan.

FAQs

How much earnest money do buyers in Henrico typically put down?

• In many Central Virginia deals, buyers use $1,000 to $5,000 or about 1 to 2 percent of the price, then adjust based on competition, property type, and risk tolerance.

When is earnest money refundable during a Henrico home purchase?

• It is typically refundable if you cancel within an active contingency period, such as inspection, financing, or appraisal, and you follow the contract’s notice rules.

Who holds earnest money in Henrico transactions?

• The contract names the escrow holder, often a title or settlement company, a closing attorney, or a brokerage trust account.

What happens if the buyer and seller disagree about the deposit?

• The escrow agent holds the funds until you both sign a release or there is a court order or other resolution under the procedures in your contract.

How fast do I need to deliver my deposit in Henrico?

• Your contract sets the deadline, often at ratification or within a few business days. Meeting this exact date is important to avoid being in breach.

How can I avoid wire fraud when sending my deposit?

• Confirm wire instructions by calling a trusted phone number, not a number in an email, and consider certified checks or in-person delivery if you prefer.