If you’re writing an offer on a South Florida home, one of the first numbers you’ll have to decide on isn’t the purchase price — it’s the earnest money deposit. Buyers often aren’t sure how much to put down, who actually holds that money, or what happens to it if the deal falls apart. Here’s a plain-English rundown.
What earnest money actually is
Earnest money is a good-faith deposit that shows a seller you’re serious about the deal. Florida law doesn’t require it, but in practice almost every contract includes one, and in a competitive listing it can help your offer stand out. The deposit isn’t an extra fee — it’s credited toward your down payment and closing costs at closing.
How much is typical in South Florida
Nationally, 1% to 3% of the purchase price is common. In Miami-Dade and Broward, where competition for well-priced homes and condos can be fierce, buyers often come in closer to 2% to 5%, or sometimes a flat number chosen to make the offer look strong. There’s no legal minimum or maximum — it’s negotiable, and your agent can help you gauge what a given listing is likely to expect.
Who holds the money
Your deposit does not go to the seller. It’s wired or delivered by check — usually within one to three business days after both sides sign — to a neutral third party named in the contract, typically a title company, a real estate brokerage’s escrow account, or a closing attorney. Florida Statutes Chapter 475 governs how real estate licensees must handle escrow funds, including keeping them in a dedicated account and never commingling them with business funds.
The contingencies that protect your deposit
A standard Florida purchase contract gives buyers several built-in exit ramps that keep the deposit refundable if you cancel within the deadline: a home inspection period (often 7–15 days), a financing/loan-approval window, an appraisal contingency, and a title review period. Miss one of those deadlines, or waive a contingency to make your offer more competitive, and you take on more risk of forfeiting the deposit if you later need to walk away.
When you can lose it
If you back out for a reason the contract doesn’t cover — cold feet, a better house down the street, missing a deadline — the seller can generally claim the deposit as liquidated damages. The escrow agent can’t just hand it to either side on request; releasing the funds requires a signed mutual agreement or a court order, so a genuine dispute can mean the money sits in escrow for a while during negotiation or litigation.
The takeaway
Earnest money is one of the more negotiable parts of a Florida offer, and getting the amount and the contingency deadlines right is part of what a buyer’s agent is there to help with. If you’re weighing an offer on a South Florida home or condo and want to talk through what deposit and terms make sense for a specific property, our team is happy to walk through it with you.
This article is for general information only and is not legal or financial advice. Contract terms and escrow requirements can vary by transaction — consult a Florida real estate attorney or your agent about your specific situation.