Writing an offer in McLean and wondering how much earnest money to put down? In a competitive Fairfax County market, your deposit signals commitment and can make or break your offer. This guide explains how earnest money works in Virginia, typical amounts in McLean, the contingencies that protect you, and the escrow timelines to expect. Let’s dive in.
Earnest money basics
Earnest money is your good‑faith deposit that shows a seller you are serious about buying. If the sale closes, the deposit is credited toward your down payment or closing costs. If the sale does not close, what happens to the deposit depends on your contract and whether you used your contingencies correctly.
In Virginia, the purchase contract names an escrow holder. Your earnest money is typically held by a title or settlement company, an attorney serving as settlement agent, or sometimes the listing brokerage if allowed by policy. It is not the same as a non‑refundable option fee. In most cases, earnest money is refundable only under contractually allowed circumstances.
Typical deposits in McLean
McLean is a higher‑priced, competitive submarket within Fairfax County. Sellers often expect larger deposits, especially at higher price points. Local patterns you will often see include:
- Modest competition: $1,000 to $5,000, or about 0.25% to 0.5% on higher prices.
- Common competitive offers: $5,000 to $25,000.
- Luxury price points: 1% to 2% of the purchase price, or larger flat amounts such as $25,000 to $50,000+ depending on the property.
A larger earnest money deposit can strengthen your offer. It also increases your risk if you waive protections. Always ask your agent what the listing’s price band and competition level suggest for a “strong” deposit on that specific home.
Key contingencies that protect you
Contingencies give you defined windows to investigate and, if needed, cancel the contract with a refund of your deposit. The exact language in your contract controls outcomes.
Home inspection contingency
- Typical window: about 5 to 14 days in local practice.
- You can inspect the home and negotiate repairs or credits. If you cancel within the inspection period and follow notice requirements, your earnest money is typically refundable.
- Shorter inspection periods can be more attractive to a seller, but be sure you have enough time to complete a thorough review.
Financing contingency
- Protects you if you cannot obtain the mortgage described in your contract by the financing deadline.
- If you apply on time, act in good faith, and are denied per the contract terms, your earnest money is typically refundable.
- A pre‑approval letter is not a binding loan commitment. Know your deadlines for application and commitment.
Appraisal contingency
- If the property appraises below the contract price and your contract allows termination, you can renegotiate, bring extra funds, or cancel within the appraisal period.
- Some buyers use appraisal gap language to stay competitive. This increases your risk if the appraisal is short and you cannot cover the difference.
Title review
- You can review the title commitment and exceptions. If title is uninsurable or materially impacts value, you can often cancel under the contract and receive a refund.
Sale of home contingency
- Less common in competitive Northern Virginia markets. If used, it needs precise timelines and definitions to protect your deposit.
Waiving contingencies
- Waiving inspection, financing, or appraisal contingencies can win you a bidding war, but it removes key protections and raises the chance of losing your earnest money if you later terminate.
Escrow, delivery, and release
- Delivery timing: Your contract may require delivery with the offer or within a set time after ratification, often 48 to 72 hours or a stated number of days. Confirm the exact language.
- Payment method: You will typically deliver a check payable to the escrow agent or wire the funds. Always verify wiring instructions directly with the escrow holder to avoid fraud.
- At closing: Your earnest money is credited toward your required funds to close.
- Release before closing: Funds are not released without a joint written agreement or other direction allowed in the contract or escrow instructions.
- If you terminate under a valid contingency: The escrow agent typically releases the deposit to you after proper notice and per contract terms.
- If you default: If you terminate without a contractual right, the seller may be entitled to keep the earnest money as liquidated damages if the contract provides that remedy, or pursue other remedies.
- Disputes: If buyer and seller disagree, the escrow agent usually holds the funds until there is a mutual release or a court order, consistent with the contract’s dispute provisions.
Offer strategies in McLean
You want to be competitive without taking on unnecessary risk. Consider these approaches:
- Use a larger but thoughtful deposit that fits the price tier and competition level.
- Keep key protections, then shorten timelines. A shorter inspection period can help while still preserving your right to cancel.
- If using appraisal gap language, set a defined cap that you can comfortably cover.
- Pair a strong deposit with clear proof of funds and a robust lender pre‑approval.
- Clarify the escrow holder in advance and have funds liquid so you can deliver on time.
Real‑world examples
- Example A: Listing price $900,000. Deposit $10,000 (about 1.1%). Contingencies include a 10‑day inspection, financing with a 21‑day commitment date, and an appraisal contingency. This keeps protection while staying competitive if other terms align.
- Example B: Listing price $1,500,000 with multiple offers. Deposit $25,000 or 1% to 2% of price. Inspection period is 5 to 7 days, financing contingency stays in place with strong lender documentation, and a limited appraisal gap. This improves competitiveness but increases deposit exposure if protections are later waived.
Buyer checklist before you write
Get fully underwritten or preapproved with your lender. Understand appraisal and financing deadlines.
Discuss deposit strategy with your local agent. Ask what sellers in your price band view as strong for McLean.
Decide on contingencies in advance. Keep inspection and financing protections unless you accept the risk of waiving them.
Confirm the escrow agent and delivery method. Verify wiring details directly with the title or settlement company.
Make funds liquid and ready. Have the deposit available to deliver on time.
Track every deadline. Inspection, financing, appraisal, and contingency removal dates often run on calendar or business days as defined by the contract.
Consider negotiation tools. Larger deposits, shorter inspection periods, appraisal gap language, and escalation clauses can help, but each changes your risk profile.
Ask for professional help on complex terms. If you are weighing waiver strategies or dealing with title or sale contingencies, review options with your agent and consider attorney input as needed.
What to do next
If you are preparing to buy in McLean or greater Fairfax County, start your financing and deposit plan now. Align your earnest money, contingencies, and timelines with the property and competition level so your offer is both strong and protected. For step‑by‑step guidance, introductions to trusted lenders and title partners, and a calm, white‑glove process from offer to close, connect with Gwak Homes.
FAQs
Earnest money refunds after inspections in Virginia
- If you terminate within the inspection window and follow the contract’s notice rules, your deposit is typically refundable. If you waived the inspection contingency, a refund is unlikely.
Low appraisal impact on a McLean purchase
- With an appraisal contingency in place, you can renegotiate, bring extra cash, or cancel within the appraisal period and receive a refund. Without appraisal protection or with an uncapped gap you cannot cover, you risk forfeiting the deposit.
Financing delays and earnest money in Fairfax County
- It depends on your contract and notices. If you acted in good faith and met timing requirements, you may be protected. Stay in close contact with your lender and agent to preserve your rights.
Seller keeping earnest money for minor deadline slips
- Usually not. The contract governs remedies and process. Many minor procedural issues can be cured if handled promptly and in good faith.
Making a strong but safe offer in McLean
- Consider a larger deposit, keep core contingencies with shorter timelines, and pair with strong proof of funds. Ask your agent which combination is most persuasive for that property and price tier.
