Earnest Money Deposit vs. Good Faith Deposit in Florida — What's the Difference?
Florida buyers often confuse earnest money deposit with good faith deposits. One is refundable under the right conditions; one typically isn't.
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Making an offer on a Florida home? Two terms get mixed up constantly: the earnest money deposit (EMD) and the good faith deposit. Knowing the difference, and what each one actually protects, can save you from an expensive mistake mid-deal. It matters most on new construction, where the rules look nothing like a resale contract.
How Earnest Money Deposits Work in Florida Contracts
An earnest money deposit is what the buyer puts up when the purchase contract is signed, to show they are serious. It sits in escrow with the title company or listing brokerage. It gets applied to your down payment or closing costs at closing. The Florida Realtors As-Is Residential Contract spells out exactly when that money is refundable and when you forfeit it.
When Is Earnest Money Refundable in Florida?
The standard Florida As-Is contract gives the buyer an inspection period — usually 15 days. During that window, you can cancel for any reason and get the full deposit back. Once that window closes, your deposit is at risk if you walk. Valid exits include a financing contingency that falls through or an appraisal gap nobody can bridge.
That is why we push every buyer to keep a financing contingency in the offer and to get fully underwritten before going under contract, not just pre-qualified. A real pre-approval is the cheapest insurance against a late-stage financing blowup that costs you the deposit.
Builder Good Faith Deposits vs. Resale EMD in Florida
Good faith deposit is a looser term. Sometimes it means earnest money. But it can also be a deposit paid straight to a builder or developer — and those come with stricter refund rules. Florida new construction deposits often turn non-refundable after a short cancellation window, so read the builder contract closely before you sign. It is also worth reading our piece on builder versus independent lender costs, since builder financing incentives tend to hide a few catches.
How Much Earnest Money Is Standard in Florida?
In Florida, earnest money usually runs 1 to 3% of the purchase price. On a $350,000 home that is $3,500 to $10,500. In the competitive South Florida markets — Palm Beach, Broward, Miami-Dade — sellers often want 2 to 3% or more before they take you seriously. Earnest money fights get ugly when a deal collapses. Get your pre-approval done before any offer that puts a deposit at risk.