Earnest money and contingencies.What a deposit rides on, from ratification to closing.
A deposit and the conditions in a contract travel as a pair. This guide follows both forward through a Virginia purchase, from the signature that makes the contract binding to the settlement table, or to the day the deal ends and the money waits.
A signed offer becomes a contract, and the deposit gets a job
An offer is only paper until the other side signs it. Once the seller accepts and the contract is ratified, two things start moving at the same moment: a deposit that now has somewhere to go, and a set of conditions that now have the contract's deadlines attached.
The signature is not a formality; the statute behind it is taken up with the other papers of a sale in what documents you need to sell land. The deposit, and every condition it rides on, live inside that signed writing.
What the deposit is, in a sentence, is defined under earnest money. None of the rules this guide relies on sets an amount for a Virginia purchase. The contract states it, along with who holds it.
The check has a deadline before the conditions do
The first deadline after ratification belongs to the money. When a real estate firm receives the deposit, Va. Code 54.1-2108.2 sets the clock one of two ways, depending on where the deposit will be held.
- In the firm's own escrow account. A deposit received by the principal broker or supervising broker, or that broker's agent, goes into the account by the end of the fifth business banking day following ratification, unless the principals agree otherwise in writing, and stays there until the transaction is consummated or terminated.
- With another escrow agent. If the deposit will not be held in the firm's account, the broker must ensure it is delivered to the escrow agent named in the contract by the end of the fifth business banking day following receipt of the deposit, unless the principals agree otherwise in writing.
The Real Estate Board's regulation supplies the account, as the earnest money entry sets out. That rule now sits in 18VAC135-20-181, effective April 1, 2026, which also has a deposit received upon ratification handled and disbursed under 54.1-2108.2. The former escrow section, 18VAC135-20-180, was repealed effective the same date.
Inside one business day, the listing admits it is under contract
While the check travels, the listing changes too. The MLS guidelines published by the Southwest Virginia Association of REALTORS, in the 2024 edition, describe Active Contingency as a status where the contract has contingencies such as financing, appraisal or home inspection, and they say the listing must be entered as Active Contingency within one business day of ratification.
So a buyer who finds a listing marked that way is looking at property already under contract, with conditions still open. The label does not say which conditions those are or how long they run; only the contract does. This site's own listing cards follow the contract status of each record, and the current listings page explains how.
Financing, appraisal, inspection, and the clause FHA and VA purchases carry
A contingency is a condition the purchase waits on. The MLS definition names three familiar ones, financing, appraisal and home inspection, but which ones a contract carries, how long each runs and what follows when one fails are terms of the contract. No Code section this guide relies on sets a length for any of them.
One condition comes with federal wording. On a purchase under HUD/FHA or VA requirements, a model amendatory clause ties the purchaser's duty to complete the purchase, and the earnest money, to a written statement of appraised value, while leaving the purchaser the option to go ahead anyway. The clause's own words are set out in the contingency entry linked above.
What a buyer's position looks like when a lender's number lands under the price is argued in what happens if the buyer's appraisal comes in low.
Land brings conditions of its own. A buyer of ground that will need a septic system may write a condition about the site into the contract, and whether that buyer can walk away when a perc test comes back bad is covered in whether a buyer can back out if the perc test fails.
A contract may also give the buyer time simply to investigate. How many days that window holds is a contract term, taken up in how long a due diligence period is.
A kickout status keeps the property on view while the first contract stands
Some contracts leave the seller room to keep marketing. The same MLS guidelines define a Contingency Kickout status, which allows the seller to continue showing the property for sale.
Under that status, an offer from a second buyer who needs no property contingency can let the seller end the first agreement, after written notice and a set time for the first buyer to decide. The status is laid out step by step in the contingency entry.
That is a status definition in the MLS guidelines, not a Virginia statute. Whether a particular contract has a kickout clause, what it treats as a property contingency and how long the first buyer gets are contract terms an attorney reads.
If your own offer would hang on selling a house first, the order of the two sales is a separate question, and whether to sell your house before you buy land takes it up.
Pending, then the settlement table: the deposit is applied, or it stays put
When no contingency is left outstanding, the MLS guidelines' Pending status fits: the property is under contract and pending settlement with no outstanding contingencies.
At a closing that goes through, the deposit is applied as the contract provides. Along the way, 18VAC135-20-181 keeps a deposit a firm holds from being counted toward a commission before the sale closes, and from paying closing expenses, unless all principals agree otherwise in writing; the expense side is covered in who pays closing costs in Virginia.
When the deal ends instead, a broker holding the deposit keeps it in escrow until one of the release paths in Va. Code 54.1-2108.2 applies. What those paths are, and how they play out when a land deal falls apart, are argued in earnest money on a land purchase contract, and who is entitled under a particular contract is a question for that contract and an attorney.
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Good questions, straight answers.
Is a contingency kickout a rule of Virginia law?
No. Contingency Kickout is a listing status defined in the MLS guidelines of the Southwest Virginia Association of REALTORS. The status allows the seller to continue showing the property, and describes the seller kicking out the first purchase agreement on an offer from a buyer prepared to perform without a property contingency, after notifying the first buyer in writing. Whether a contract carries a kickout, and on what terms, is in that contract, and an attorney reads it.
Can the buyer and seller agree in writing to handle the deposit differently?
On several points the rules leave room for it. The fifth business banking day deadlines in Va. Code 54.1-2108.2 apply unless the principals agree otherwise in writing, and 18VAC135-20-181 sends earnest money deposits into an escrow account unless all principals to the transaction have agreed otherwise in writing. What such an agreement says, and whether it fits a particular deal, is for the contract and an attorney.
Is 18VAC135-20-180 still the Virginia rule for escrow accounts?
No. 18VAC135-20-180 was repealed effective April 1, 2026. The Real Estate Board's escrow rules now sit in 18VAC135-20-181, effective the same date, and that section has an earnest money deposit received upon ratification deposited, handled and disbursed under Va. Code 54.1-2108.2. Older summaries that still cite section 180 are out of date.
Where this page's facts come from
Every rule, office and figure above traces to one of these. Rules change; check the office before you act on one.
- Va. Code 11-2: contracts that must be in writing Virginia General Assembly
- Va. Code 54.1-2108.2: earnest money deposits held by brokers Virginia General Assembly
- 18VAC135-20-181: maintenance and management of escrow accounts Virginia Real Estate Board
- 18VAC135-20-180 (repealed effective April 1, 2026) Virginia Real Estate Board
- Va. Code 55.1-1008: escrow funds held by settlement agents Virginia General Assembly
- Va. Code 55.1-1002: applicability of the settlement agent chapter Virginia General Assembly
- Va. Code 55.1-703: required disclosures under the Residential Property Disclosure Act Virginia General Assembly
- Amendatory clause model document U.S. Department of Housing and Urban Development
- MLS guidelines (2024 edition): listing status definitions Southwest Virginia Association of REALTORS
- Mortgage key terms: earnest money Consumer Financial Protection Bureau