Florida Earnest Money Deposit

How much earnest money is normal in Florida

The amount is negotiated, not set by law. In practice, the deposit signals how serious your offer is and how much the seller can claim if you default. Some reference points on Florida values from Zillow's index:

• Typical Florida home, $375,361: 1% is about $3,754, 3% about $11,261, 5% about $18,768.
• Typical Florida condo, $262,592: 1% is about $2,626, 3% about $7,878.
• Typical single-family home, $396,809: 3% is about $11,904.

Higher deposits make sense when you're competing with other offers, buying a higher-priced home, or offering cash, since a cash buyer has no financing contingency to point to as proof of commitment. A lower deposit may work on a listing that has sat for a while. Statewide values are down 0.9% over the past year, and in slower segments sellers are often flexible on deposit size.

Many contracts split the deposit: a smaller initial deposit at signing and an additional deposit after the inspection period ends. That limits how much you have at risk while you're still inspecting.

Deadlines: when the deposit is due

The Florida Realtors and Florida Bar residential contracts, both AS IS and Standard, set the initial deposit as due within 3 days after the Effective Date unless you write in something different. The Effective Date is when the last party signs or initials the final version of the offer.

If there's an additional deposit, the contract states when it's due, often a set number of days after the Effective Date or right after the inspection period. Missing a deposit deadline can put you in default, so treat it as seriously as the closing date.

Plan the transfer early. Wires can take a day, and title companies usually need a call-back verification before they accept funds. Out-of-state and international buyers should allow extra time, especially for funds coming from a foreign bank.

Who holds the escrow deposit

The contract names an escrow agent. In Florida that's usually one of three:

• A title company, the most common choice.
• A Florida real estate attorney, more common in some counties and in deals the attorney is closing.
• A real estate brokerage's escrow account. Florida law requires a broker to deposit escrowed funds by the end of the third business day after receiving them, and brokers face strict rules on handling disputes.

The escrow agent holds the money in a trust or escrow account and releases it only according to the contract or a written agreement signed by both parties, or a court or other legal process. At closing, the deposit is credited toward your down payment and closing costs. It isn't an extra cost.

Writing the deposit terms into your offer

The deposit lines on the contract are short, but each blank matters. Fill in the initial amount, the additional amount if any, the date or trigger for the additional deposit, and the escrow agent's name and contact details. Confirm that the escrow agent named is the one actually closing the deal.

A structure I often suggest on financed offers: a moderate initial deposit, then an additional deposit due a day or two after the inspection period ends. The seller sees a meaningful total commitment, and most of your money goes in only after you've decided to keep the house. On cash offers, a larger single deposit plus proof of funds usually carries more weight with the seller than a long list of terms.

When you get your deposit back, and when you don't

Your deposit is protected when you cancel in time under a right the contract gives you. Common ones:

• Inspection period (AS IS contract): cancel for any reason by written notice before the period ends. The default is 15 days if left blank.
• Financing contingency: if you can't get loan approval by the loan approval period and you give notice in time, the deposit comes back.
• Condo document review: resale condo buyers can cancel within 7 days, excluding weekends and legal holidays, after receiving the association documents.
• HOA disclosure: if you didn't get the HOA disclosure summary before signing, you have 3 days after receiving it to cancel.
• Title problems the seller can't cure in the time allowed.

You risk the deposit when you miss a deadline, cancel without a contractual reason, or fail to close. In the Florida contracts, the seller's remedy for buyer default is usually to keep the deposit as agreed liquidated damages, though the forms let a seller choose other remedies in some cases. Read that paragraph before you sign. This isn't legal advice.

What happens in a deposit dispute

If buyer and seller both claim the deposit, the escrow agent can't just pick a side. A title company or attorney holding the funds will usually wait for a signed release from both parties or ask a court to decide through an interpleader action.

A broker holding the funds has short deadlines to notify the Florida Real Estate Commission of conflicting demands and to start a settlement procedure, such as mediation, arbitration, a request for an escrow disbursement order, or litigation. The process takes time, so most disputes settle with a written release splitting or returning the deposit.

The best protection is documentation: send all notices in writing, by the method the contract requires, before the deadline, and keep proof of delivery.

New construction deposits and wire fraud

Builder deposits work differently. New construction contracts often ask for larger deposits, sometimes paid in stages, and for upgrades and options. For new condos, Florida law requires deposits up to 10% of the price to be held in escrow, and allows amounts above 10% to be used for construction if the contract says so. For new single-family homes, read the builder's contract to see where the deposit goes and when it becomes nonrefundable. New-construction condo buyers also have 15 days to cancel after signing or receiving the required documents.

Wire fraud targets earnest money and closing funds. Criminals send fake wiring instructions that look like they're from the title company. Before any wire, call the title company at a phone number you found yourself, not one in the email, and confirm the instructions verbally. Title companies don't change wiring instructions by email.

If you're preparing an offer and want to size the deposit against the local market, ask for a shortlist and I'll suggest a deposit range for each home.