Are you wondering how much cash you need upfront to buy a home in Fairfax County—and what happens to that money if you change course? You are not alone. Between earnest money, Virginia’s due diligence fee, and your down payment at closing, it can feel confusing. In this guide, you will learn what each term means, how they work together, and when funds can become non‑refundable so you can make confident decisions. Let’s dive in.
Earnest money basics in Fairfax County
Earnest money is a good‑faith deposit you agree to put into escrow soon after your offer is accepted. It shows the seller you intend to perform and gives them some protection if you default. In Fairfax County, the escrow agent is usually a settlement or title company named in the contract.
Your contract will state when the deposit is due, often within 1 to 3 business days of ratification. While your contingencies are active, earnest money is typically refundable if you terminate for an allowed reason under the contract. If you close, your earnest money is credited to your final cash to close.
Down payment explained
Your down payment is your equity contribution paid at closing. The rest of the price is covered by your loan. Your down payment affects your loan type, mortgage insurance, and monthly payment.
Common loan programs allow a range of down payments. FHA often permits 3.5% down for qualified buyers. Some conventional programs allow as little as 3% for eligible borrowers, and many buyers choose 5% to 20% or more. Eligible VA and USDA borrowers may be able to put 0% down. Your lender will document your funds, including any gifts, according to program rules.
Virginia’s due diligence fee
Virginia contracts often include a due diligence fee that you pay directly to the seller. This fee compensates the seller for taking the home off the market while you inspect and investigate. Unlike earnest money, the due diligence fee is generally non‑refundable after the agreed due diligence period ends.
The fee amount and the number of due diligence days are negotiated in your offer. If you close, the fee is credited to you on the settlement statement, just like earnest money. If you terminate within the due diligence window as allowed by the contract, you typically preserve your earnest money and do not owe further obligations under that provision.
Typical local amounts
Fairfax County sits in a high‑cost, competitive market. Amounts vary by property type, price point, and how competitive the listing is. Here is what buyers often see locally.
Earnest money ranges
- Condos and lower‑priced properties: commonly $1,000 to $5,000.
- Mid to higher‑priced single‑family homes: often $5,000 to 1%–3% of the purchase price. In highly competitive situations, buyers may offer more to show strength.
- Luxury or hot listings: larger deposits are common and may reach several percent of the price.
Your contract sets when the deposit is due, often within a few business days of ratification. Ask your agent to confirm exact timelines and delivery instructions.
Due diligence fee ranges
- Modest markets or condos: often $500 to $2,000.
- Typical Fairfax single‑family homes: often $1,000 to $5,000, with higher fees in competitive bids.
- Intense competition: buyers sometimes increase the fee to strengthen offers.
The due diligence period is usually negotiated in the 7 to 21 day range, but it can be shorter or longer based on the situation and your inspection needs.
Down payment expectations
Because Fairfax County prices are above the national median, even smaller percentages equal larger dollar amounts. Many buyers use conventional loans with 5% to 20% down. First‑time buyers and eligible borrowers may use FHA, VA, or USDA programs with lower or no down payments.
Contingencies and when money is refundable
Your right to a refund of earnest money depends on your contract and timelines. The main contingencies to understand are below.
Inspection and due diligence
Your contract may give you a due diligence period to complete inspections and cancel for any reason within that window. If you terminate on time and in writing, your earnest money is typically refundable under the contract’s terms. After the deadline passes, you lose that unrestricted right to terminate for inspection issues, and the due diligence fee usually becomes non‑refundable.
Financing contingency
If you include a financing contingency and cannot obtain your loan despite good‑faith efforts, you can usually cancel and receive your earnest money back if you act within the contract’s timelines. If you waive the contingency or miss deadlines, your deposit can be at risk.
Appraisal contingency
If the appraisal comes in low and you have an appraisal contingency, you may terminate in writing per the contract and preserve your earnest money. If you waive the contingency or agree to proceed without a price adjustment, you assume more risk.
Title review
Contracts provide a period to review title. If material title defects are not cured, you can often terminate and keep your earnest money if you act within the contract’s deadline.
When funds “go hard”
Fund risk increases as contingencies expire. In practice, earnest money becomes most at risk after you miss or remove key contingencies without terminating, or if your contract includes a clause that makes the deposit non‑refundable at a certain milestone. The exact moment is set by your executed contract.
The due diligence fee usually becomes non‑refundable at the end of your due diligence period if you remain under contract. This is why careful calendaring and timely written notices are essential.
A simple Fairfax timeline
Ratification and deposit
Once your offer is accepted and signed by both parties, the clock starts. Your earnest money is due according to the contract, often within 1 to 3 business days. The escrow agent will issue a receipt once funds are received.
During due diligence
Schedule inspections quickly and review results with your agent. If you plan to terminate based on inspection findings, you must do so in writing before the deadline to preserve your earnest money. If you continue, expect your due diligence fee to be non‑refundable after the period ends.
Appraisal and loan approval
Your lender orders the appraisal and advances your loan file. If appraisal or financing issues arise, follow the contract’s notice procedures and timelines to protect your earnest money.
Final steps and closing
Before closing, confirm your cash to close with your lender and settlement company. Your earnest money and any due diligence fee will be credited on your closing statement. Bring your remaining down payment and closing costs by wire per the title company’s instructions.
Handling funds safely
Treat every wire and check instruction with care. Wire fraud is common, and escrow agents follow strict procedures before releasing any money.
- Verify wire instructions by calling the settlement company at a known number before you send funds.
- Get written receipts for deposits and keep them with your records.
- Track your earnest money, due diligence fee, and down payment separately so you always know what is committed, refundable, or reserved for closing.
Planning checklist for Fairfax buyers
- Confirm your liquid funds and comfort level for earnest money, due diligence fee, and down payment.
- Review your loan program’s minimum down payment and documentation rules with your lender.
- Ask your agent about current norms for deposits and due diligence fees in your specific submarket.
- Negotiate a due diligence period that fits your inspection plan without weakening your offer.
- Calendar all deadlines: inspection/due diligence, loan commitment, appraisal, and title review.
- Deliver earnest money on time, get receipts, and maintain written notices for any changes or termination.
- Before closing, verify how your earnest money and due diligence fee will appear as credits on your settlement statement.
Common mistakes to avoid
- Offering a large non‑refundable fee without enough inspection time.
- Missing a termination deadline because a vendor was booked up.
- Wiring funds without verifying instructions by phone with the settlement company.
- Assuming your deposit is always refundable even after removing contingencies.
- Forgetting that local norms vary by neighborhood, property type, and competition.
How funds show up at closing
At closing, you will see your earnest money credited on the buyer side of the settlement statement. If you paid a due diligence fee and you close, that amount is also credited to you. Your lender’s funds plus your down payment make up the rest of the purchase price and closing costs.
Your final “cash to close” equals the total you owe after subtracting credits, including seller credits, prorations, and your prior deposits. Ask the settlement agent to walk you through line items so you leave with clear records for your files.
If you want white‑glove guidance on deposits, timelines, and negotiation strategy tailored to Fairfax County’s market, connect with Gurdeep Mangat to schedule a complimentary consultation.
FAQs
How much earnest money should I offer in Fairfax County?
- Many buyers offer $5,000 to 1%–3% of the price, with condos often on the lower end and competitive single‑family homes on the higher end. The right number depends on your price point and the listing’s competitiveness.
Is the Virginia due diligence fee required in every offer?
- The fee is negotiated. It is common in Virginia contracts and is typically non‑refundable after the due diligence period ends, but your exact terms depend on your contract.
When does earnest money become non‑refundable?
- Earnest money is most at risk after you miss or remove contingencies and remain under contract. Refund rights are controlled by your contract and whether you meet notice deadlines.
Can I get my earnest money back if financing falls through?
- If you included a financing contingency and act within the contract’s timelines, earnest money is usually refundable. Waiving the contingency or missing deadlines increases risk.
What happens if the appraisal is low in Fairfax County?
- If you have an appraisal contingency, you can typically renegotiate or terminate per contract terms. If you waive the contingency and proceed, your deposit may be at risk if you later default.
Who holds earnest money in Northern Virginia?
- Your contract usually names a settlement or title company as the escrow agent. The agent holds funds until closing or release by written agreement or court order.
What if the buyer and seller disagree about releasing earnest money?
- The escrow agent will hold the funds until both parties agree in writing or a court orders release. Contracts may require mediation or other dispute steps.
