Who Holds Your Earnest Money in Virginia: What the Code and the Real Estate Board Require of a Broker

Published October 22, 2026

A licensed Virginia broker who receives your earnest money must put it in a federally insured escrow account, or deliver it to the escrow agent named in your contract, by the end of the fifth business banking day after the contract is ratified. That timing comes from Code of Virginia 54.1-2108.2, and the rules for the account itself come from the Virginia Real Estate Board‘s regulation 18VAC135-20-181.

The contract, not the law, sets how much you pay and when you owe it. This guide covers what the law says about where the money sits and what the holder may and may not do with it. It is general information, not legal advice. For your own contract, ask a Virginia real estate attorney. If you want the amount side, start with our guide to earnest money in Richmond. If you are weighing a walk-away, read backing out of a Richmond contract. The rules below apply whether the home is in the city of Richmond, Henrico County or Chesterfield County.

Four rules that decide where your deposit sits

1. It goes into escrow, not the broker’s own account. The firm must keep one or more federally insured accounts for money received in a real estate transaction, in the name the firm is licensed under, and label the accounts and bank statements “escrow” (18VAC135-20-181).
2. The clock starts at ratification. The deposit goes into the firm’s escrow account by the end of the fifth business banking day after the contract is ratified, unless the principals agreed otherwise in writing (54.1-2108.2).
3. It stays there until the deal closes or ends. The statute says the deposit remains in the account until the transaction has been consummated or terminated.
4. The broker cannot use it. The regulation bars mixing client money with the broker’s own funds, and it requires the balance to cover every dollar the firm holds for clients at all times.

Who actually holds the money

Two holders are possible. The first is the broker’s firm, which keeps the deposit in its escrow account. The principal broker is responsible for those accounts and must have signatory authority on them, according to the regulation. The second is an escrow agent named in the contract. If the broker receives a deposit that is not going into the firm’s own escrow account, the broker must see that it reaches the named agent by the end of the fifth business banking day after receipt (54.1-2108.2).

Your contract names which one applies. We are not going to guess at the usual choice in the Richmond market, because the statute does not say and we have no source that does. Find the escrow paragraph in your contract and write down the holder’s name and how the deposit is to be delivered. Then confirm that name with your agent before you send money. If an email arrives later with different payment instructions, treat it as suspect and read how to verify wire instructions first.

When the deposit is due

There are two different clocks, and buyers mix them up. Your clock is in the contract: it says how much you owe and when you must deliver it. The broker’s clock is in the statute: five business banking days from ratification, or from receipt when the money goes to a named escrow agent. The statute does not define the buyer’s deadline, and we are not going to supply a typical one.

Count business banking days, not calendar days, and ask your agent to put the exact dates in writing. If a deadline falls close to a weekend or bank holiday, ask the escrow holder to confirm the date in an email. A late deposit is a contract problem, and what it costs you depends on what your contract says, which is a question for your attorney. Our guide to the weeks between approval and closing lists the other dates that tend to cluster in the same stretch.

What a broker may not do with your deposit

The regulation is specific. A licensee may not deduct closing expenses such as appraisal, insurance or credit report fees from a deposit or down payment unless all principals agree otherwise in writing. A licensee may not take any part of the deposit as commission until the transaction has been consummated, again unless all principals agree in writing. And the regulation lists what it calls improper maintenance of escrow funds: commingling, failing to use an account designated to receive only such funds, failing to keep a sufficient balance, and accepting a note or other not readily negotiable item as a deposit without acknowledging it in the agreement.

There is one interest rule worth reading in your contract. If the account bears interest, the regulation requires written disclosure in the contract, at the time the contract is written, of how the interest will be disbursed. If you see an interest-bearing account mentioned and no disclosure, ask about it.

How the deposit shows up at closing

Until the sale is consummated, the money stays in escrow. At closing, the settlement agent handles the money that comes in. Under Code of Virginia 55.1-903, the agent must record the deed and other required documents and disburse settlement proceeds within two business days of settlement, and generally may not disburse funds before recordation. A separate regulation, 18VAC135-20-310, requires a licensee to give buyer and seller a statement of receipts and disbursements, unless another settlement agent closes the deal and the licensee’s disbursement is shown on the settlement statement.

What that means in practice: ask your settlement agent to show you where your deposit appears on the paperwork, and compare it to what you paid. Your Closing Disclosure arrives before closing, so that is the time to look. How the deposit is applied to your costs is set by your contract, and we are not going to describe a standard treatment. If part of the proceeds is held back after closing, see escrow holdbacks at a Richmond closing. To see who else sits at the table, read who is at a Virginia closing table.

Questions to ask before you send the money

• Who is the named holder, and is it the firm’s escrow account or an escrow agent?
• What date will the money be placed in escrow, counting business banking days from ratification?
• Is the account interest-bearing, and where does the contract say who gets the interest?
• Does anything in my contract let fees come out of the deposit?
• What happens to the deposit if I end the contract? That is covered in our companion guide on how a broker must handle a deposit when a purchase ends early.

If you work with a buyer’s agent, the same questions apply to their firm. Our guide to the buyer agency agreement in Virginia explains what you sign with the agent. A lender can also help you plan the cash needed on each date: see our preferred lenders page, and see how we work with buyers. If you are still searching, a saved property search is the place to start.