One of the items I often get follow up questions about from buyers is the Earnest Money Deposit (EMD.) This is the first time you as buyers will have to provide some form of money in the home buying process. It can vary but the EMD is often due within three days to the brokerage so it can be placed in an escrow account. I personally like to collect the check upon writing and submitting your contract so no one has to meet up in the days following the contract acceptance.
The rules can vary from agency to agency but the points below cover the general rules followed by brokerages in Virginia concerning Earnest Money Deposits.
5 Things to Note About Earnest Money Deposits
Earnest Money is only deposited if your contract is accepted by the sellers.
The money is withdrawn from your account and held in escrow, typically by your agent’s brokerage.
It is used to show the seller you are serious. In the contract (in Virginia) it states that you can lose your EMD if you as the buyer decide you do not want to purchase the home without cause or reason (aka nothing to do with your inspections). I have rarely ever seen this happen.
This money is yours as the buyer and will be applied toward your closing costs and fees or given back to you at closing.
Should you terminate your Purchase Contract due to inspection related items you should receive your Earnest Money Deposit back post signing of the contract release form.