How to get back my earnest money deposit?

Question Details: I put an earnest money deposit down on a house with a settlement company. The inspection revealed issues we were unaware of when contract signed. We notified the settlement company and owner that we were not buying the house well before the stated deadline in the contract. The settlement company refuses to return my money because the seller did not sign a release of the money. This was a "For Sale By Owner". The contract had a clause see below that stated the buyer me would get the money back if my intentions to not buy were done within the contract listed time frame. She said it did not matter what the contract says because VA law states buyer and seller has to sign a release before the money can be released. The passage in the contract, signed by me and the seller, states this. I thought when the seller and me signed the contract we were agreeing to what is stated in the contract. I do not know what to do next. The contract stated, "Buyer may give Seller the option to correct the conditions that are unsatisfactory to the Buyer. Should Buyer elect to terminate this Agreement or Seller is unwilling to correct any unsatisfactory conditions the Buyer shall notify Seller on or before 5:00 PM on 21 days from Seller's acceptance of Buyer's election to terminate this Agreement and if terminated this Agreement shall be null and void and any deposit monies paid hereunder shall be returned immediately to Buyer and neither Buyer nor Seller shall have any claims against each other under the terms of this Agreement. If Buyer fails to notify Seller as provided herein, this contingency shall be deemed satisfied and this Agreement shall continue in full force and effect".

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