Most Short Pump buyers put down roughly 1% to 3% of the purchase price as an earnest money deposit, but that number is negotiated in the contract, not set by Virginia law or by any lender. On a home near the $520,000 to $527,000 local median, that is about $5,200 to $15,800. The deposit is not an added fee. It is credited back to you at settlement toward your down payment or closing costs. Duane Buziak helps Henrico County buyers size the deposit against their total cash to close and verify financing early with a NoTouch Credit Pull, so the money you commit is protected by a realistic plan.
Written by Duane Buziak, NMLS #1110647 | Coast2Coast Mortgage LLC NMLS #376205
What Earnest Money Typically Looks Like in Henrico County
Earnest money is a good-faith deposit you make after the seller accepts your offer and the contract is ratified. It is held in escrow, usually by the title company or in a broker’s escrow account, and it shows the seller you are serious. At closing, it is applied to your side of the ledger.
The common range is 1% to 3% of the price. No Virginia statute and no loan program requires a specific amount, so the number in your contract controls. Local norms also shift with the market, and what is typical as of October 2026 may not hold next spring. Ask your REALTOR what recent accepted offers in your price band have looked like rather than relying on a rule of thumb.
Against the Short Pump median of roughly $520,000 to $527,000, the range works out like this:
- 1%: about $5,200 to $5,270
- 2%: about $10,400 to $10,540
- 3%: about $15,600 to $15,810
Townhomes near Short Pump Town Center or West Broad Village sit below the median, so the dollar figure for the same percentage is smaller. Larger single-family homes near Deep Run High School or in the Nuckols Farm Elementary zone run higher.
Two mistakes show up often. A deposit that is too low can weaken your offer when several buyers are competing, because the seller reads it as a signal of commitment. At the other end, an oversized deposit adds risk: if a deadline slips or a dispute arises, more of your cash is tied up while the parties sort it out. The goal is an amount that looks serious to the seller but that you could absorb losing in a worst case.
Earnest Money vs. Down Payment vs. Closing Costs
These three get confused because they all come out of your savings. Earnest money is paid early and is credited toward the other two. The down payment is the part of the price you do not finance, and its minimum is set by the loan program. Closing costs are the fees, prepaid taxes, insurance, and escrow deposits needed to settle. The deposit is simply the first installment of the cash you were already going to need.
The key difference is who sets the number. The program sets the down payment. You and the seller set the earnest money. A VA or USDA buyer can have no down payment requirement and still owe a deposit, because the contract still calls for one.
The table below shows typical minimums as of October 2026. Programs change, so confirm current figures at HUD’s FHA Section 203(b) page, VA.gov’s funding fee page, and the Fannie Mae Selling Guide.
| Program | Minimum down payment | Typical earnest money | Mortgage insurance / funding fee | Minimum credit score |
|---|---|---|---|---|
| FHA | 3.5% with a 580+ score; 10% for 500 to 579 | 1% to 3%, negotiated | Upfront and annual FHA mortgage insurance | 580 for 3.5% down; 500 with 10% down (lender overlays vary) |
| VA | 0% for eligible borrowers | 1% to 3%, negotiated | VA funding fee (varies by use and down payment; some exempt) | No VA minimum; Duane Buziak works with scores to 500 |
| USDA | 0% in eligible areas | 1% to 3%, negotiated | Upfront guarantee fee and annual fee | Often 640 for streamlined review; others vary |
| Conventional | 3% to 5% common | 1% to 3%, negotiated | Private mortgage insurance under 20% down | Commonly 620 |
Dynamo DPA and Turbo DPA can reduce the cash you need at settlement, which matters when you are deciding how much to commit up front. Eligibility, terms, and availability depend on the program and your file, so Duane Buziak reviews them with you before you set a deposit. Note that USDA eligibility also depends on property location, so not every Henrico address qualifies.
Worked Example: A $525,000 Short Pump Home
Suppose you offer $525,000 on a single-family home and agree to a 2% deposit. Here is the math, step by step.
FHA purchase
- Earnest money: 2% of $525,000 = $10,500, due within the number of days stated in the contract.
- Down payment: 3.5% of $525,000 = $18,375.
- Still due at closing toward the down payment: $18,375 minus $10,500 = $7,875.
- Base loan amount: $525,000 minus $18,375 = $506,625.
That base loan is before any financed upfront mortgage insurance premium. FHA lets the premium be added to the loan, and the current rate should be confirmed on HUD.gov before you build a payment estimate. The $7,875 is also not your full cash to close. Closing costs and prepaids come on top, and the amount depends on your lender, title charges, and the closing date.
Conventional purchase
Now take the same home with 5% down and a 3% deposit. The deposit is $15,750. The down payment is $26,250, so $26,250 minus $15,750 leaves $10,500 still due toward the down payment. The base loan is $498,750. The credit works exactly as it did on the FHA loan: money you already paid reduces what you bring at settlement.
Notice that a bigger deposit does not make the home cost more. It only moves cash forward in time. What it changes is how much of your savings is at risk before closing.
Payment figures are intentionally left out here. Your rate, mortgage insurance, taxes, and homeowners insurance change with the market and with your file, so a payment should come from a current quote labeled with its date, not from a fixed number in an article.
When You Can Lose Your Deposit and When It Is Refunded
Whether you get the deposit back depends on the contingencies in your contract and on whether you meet their deadlines. Contingencies are conditions that let you exit the deal and recover your money if they are not satisfied. The usual ones cover:
- Financing: you cannot obtain the loan described in the contract.
- Appraisal: the home does not appraise at or above the price, subject to what the contract says.
- Home inspection: you can negotiate repairs or terminate within the inspection window.
- Title: a title problem cannot be cleared.
Each has a deadline. Miss the date and the protection can lapse, which is where deposits are most often put at risk.
Common ways buyers get into trouble
- Waiving the appraisal or financing contingency to win a bidding contest without a plan for covering a gap or confirming the loan.
- Letting the inspection window pass while waiting on a contractor or a second opinion.
- Backing out for a reason the contract does not cover, such as a change of heart or a new job offer elsewhere.
If buyer and seller disagree about who is entitled to the deposit, escrow generally holds the funds until both sign a release, or until a court or an agreed process resolves the matter. That can take time. Read your contract closely and lean on your REALTOR’s guidance and the Virginia forms they use. This article is not legal advice, and a real estate attorney is the right call for a contested deposit.
Early financing verification reduces one of the biggest risks. With a soft credit pull mortgage pre-approval from Duane Buziak, using a NoTouch Credit Pull and no hard inquiry, your income, assets, and program fit are reviewed before you write an offer. A financing contingency is far less likely to fail when the file was examined first, and you can still decide with confidence whether to waive or shorten it.
How to Choose Your Deposit and Prove the Funds
Work through the decision in this order:
- Total your cash to close. Add the down payment, estimated closing costs, and prepaids, then subtract any seller credits or assistance you expect.
- Ask your agent about competition. How many offers are recent homes in that neighborhood drawing, and what deposits are winning?
- Read the seller. A seller who needs a fast, certain close may value a stronger deposit more than a few thousand dollars of price.
- Set a ceiling. Pick the amount you could lose in a worst case without derailing your closing funds.
Then prove where the money came from. Underwriters document bank statements, and a deposit that cannot be traced to your own account can trigger questions and delay. Funds that sit in your account for a period are considered seasoned, and large unexplained deposits need a paper trail. Gift funds are allowed under many programs but must follow specific rules, including a gift letter and documented transfer. See the Fannie Mae Selling Guide on personal gifts for the conventional requirements, and check HUD Handbook 4000.1 for FHA.
A mortgage pre approval without hard pull lets you set a realistic budget before the offer. That no hard inquiry mortgage pre approval workflow means you can plan the deposit against a verified loan amount rather than a guess, and you are not stacking inquiries on your credit while you shop.
Price limits also frame the budget. For 2026, the FHFA conforming loan limit is $806,500 for most counties, with a high-cost ceiling of $1,249,125, per the FHFA 2026 announcement. With a Short Pump median in the low $520,000s, most local purchases fall well inside the baseline limit.
Why Short Pump Buyers Use Duane Buziak Instead of a Single-Shelf Retail Lender
The structural difference is shelf size. Retail lenders typically offer only their own products and pricing. Duane Buziak is an independent broker with access to 500+ wholesale lenders, so when your cash is limited he can compare programs, fee structures, and assistance options instead of fitting you into one lender’s menu. That matters most in the exact situation this article is about: deciding how much cash to commit before you know what your closing will cost.
The programs available through Duane Buziak include:
- FHA, where he has built his reputation on competitive pricing
- VA, with options down to a 500 FICO
- USDA for eligible properties
- Dynamo DPA and Turbo DPA to reduce cash needed at settlement
Early planning runs through a soft pull mortgage broker process. The NoTouch Credit Pull means no credit hit mortgage application at the start, so you can learn what you qualify for, test a few price points, and size your deposit without adding hard inquiries while you are still deciding.
Duane Buziak can also walk you through no-out-of-pocket closing options, which are structures to discuss based on your program, the seller’s willingness to contribute, and the property, not a guarantee. His track record includes more than 1,400 five-star reviews, a figure to confirm against his current review profile before you rely on it. The point is not that any retail lender is a poor choice. It is that a broker can compare many options on your behalf, which is useful when every dollar of cash to close counts.
Earnest Money Questions from Short Pump and Henrico Buyers
How much earnest money should I offer on a Short Pump townhome?
Typically 1% to 3% of the price, so roughly $4,000 to $13,000 on many townhomes depending on the price. Your REALTOR can tell you what is winning in your specific neighborhood right now.
Is earnest money refundable in Henrico County?
It is refundable when you terminate under a valid contingency within its deadline, and at risk when you miss a deadline or back out for a reason the contract does not cover. Check your contract and Virginia REALTOR forms for the exact terms.
Who holds earnest money in Virginia?
Usually a title company or settlement agent, or a real estate broker’s escrow account, as named in your contract. Confirm who is named before you wire funds.
Do FHA, VA, and USDA buyers pay earnest money?
Yes, because the deposit comes from the contract, not the loan program. A VA or USDA buyer with no down payment requirement can still owe one, and it is credited at closing.
Can I use gift funds for earnest money?
Often yes, but the gift must follow program rules, including a gift letter and a documented transfer. Tell Duane Buziak before you deposit gift money so the paper trail is clean.
How fast is earnest money due after my offer is accepted?
It is due within the number of days written in your contract, commonly a few business days after ratification. Verify the exact deadline on your Virginia contract form.
Does earnest money count toward closing costs?
Yes, it is credited toward your down payment or closing costs at settlement, and your closing disclosure will show it. You can start with a no credit hit mortgage application to see your full cash-to-close picture.
What happens to my deposit if the appraisal comes in low?
If your contract has an appraisal contingency and you act within its deadline, you can usually renegotiate or terminate and recover the deposit. If you waived it, you may owe the gap or risk the deposit, so confirm your terms before waiving.
A 1% to 3% Deposit Is a Negotiated Number You Get Credited at Closing
The deposit is not a fee and not a legal requirement. It is a negotiated amount that comes back to you as a credit at settlement, and it is protected only as long as you respect your contract’s contingencies and deadlines. Pick an amount that signals commitment to the seller and that you could absorb in a worst case, then confirm your financing before you write the offer.
Call (804) 212-8663 for a NoTouch Credit Pull pre-approval from Duane Buziak at Short Pump Mortgage by Duane Buziak. You will leave with a clear cash-to-close number and a deposit you can defend.
Ready to find the right mortgage solution for your Short Pump area home? Connect with our local mortgage experts today for personalized guidance and access to multiple lenders who compete for your best rate.