Earnest Money Deposit vs. Good Faith Deposit in Florida — What's the Difference?

Educational content only. This article is for informational purposes and does not constitute financial, legal, or lending advice. Loan programs, rates, and eligibility requirements change frequently. Consult a licensed mortgage professional before making any borrowing decision. Mortgage Capital | NMLS# 1859012 | Licensed in Florida.

When making an offer on a Florida home, you'll encounter two financial terms that are often confused: earnest money deposit (EMD) and good faith deposit. Understanding the difference — and the protections each provides — can prevent costly mistakes during the transaction. This distinction is especially important in new construction purchases, where the rules differ significantly from resale contracts.

How Earnest Money Deposits Work in Florida Contracts

An earnest money deposit in Florida is a sum paid by the buyer upon executing the purchase contract to demonstrate serious intent. It is held in escrow — typically by the title company or the listing brokerage — and applied to the buyer's closing costs or down payment at closing. The Florida Realtors As-Is Residential Contract specifies the conditions under which EMD is refundable or forfeitable.

When Is Earnest Money Refundable in Florida?

Under the standard Florida As-Is Residential Contract, the buyer has an inspection period — typically 15 days — during which they can cancel for any reason and receive their full earnest money deposit back. After the inspection period ends, the deposit is at risk if the buyer fails to close without a valid contractual reason, such as a failed financing contingency or an appraisal gap that the parties cannot resolve.

This is why Mortgage Capital strongly recommends always including a financing contingency in your offer — and getting fully underwritten pre-approved before going under contract, not just pre-qualified. A true pre-approval significantly reduces the risk of a late-stage financing failure that could cost you your deposit.

Builder Good Faith Deposits vs. Resale EMD in Florida

A good faith deposit is a broader term sometimes used interchangeably with earnest money — but it can also refer to an upfront deposit paid directly to a builder or developer, which carries different and often stricter refund rules. New construction deposits in Florida are frequently non-refundable after a short cancellation window, so review your builder contract carefully before signing. Also read our article on builder vs. independent mortgage lender costs — builder financing incentives often come with hidden costs.

How Much Earnest Money Is Standard in Florida?

The typical earnest money deposit in Florida ranges from 1–3% of the purchase price. On a $350,000 home, that's $3,500–$10,500. In competitive South Florida markets (Palm Beach, Broward, Miami-Dade), sellers sometimes expect 2–3% or more to take an offer seriously. Because disputes over earnest money can become contentious if a deal falls through, apply for your pre-approval before making any offer that requires a deposit.