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 cause constant confusion: 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.
Who holds the money in Florida
In a Florida residential contract the deposit usually goes to the title company or the listing brokerage as escrow agent.
The escrow agent is neutral. It cannot release funds to either side without written agreement or a court order.
That matters in a dispute. A seller cannot simply keep your deposit, and you cannot simply demand it back.
Florida also has a specific procedure where a broker holds disputed funds, involving notice to the Florida Real Estate Commission.
How contingencies protect the deposit
The financing contingency is the one buyers rely on most. If the lender declines your loan within the period, the deposit returns.
The inspection period works the same way. In Florida contracts it is often an unrestricted right to cancel within a set window.
Appraisal is separate. Not every contract includes appraisal protection, and in competitive markets buyers sometimes waive it.
Read which of the three you actually have before you assume the money is safe.
How much to put down
One to three percent of the purchase price is common in Florida residential contracts.
In competitive South Florida submarkets, buyers sometimes offer more to signal seriousness.
A larger deposit strengthens an offer and increases what is at risk if you default.
It counts toward your down payment at closing, so it is not an additional cost.
It is money committed early, and that is the real consideration.
When you can lose it
Walking away after your contingency periods expire is the main way.
Failing to close on a contract with no financing contingency is another.
Missing a deadline written into the contract can also do it, even by a day.
Florida contracts are specific about timing. Diary the dates rather than trusting memory.
Wire fraud is the real risk
Deposit funds are a standard target for wire fraud. Criminals spoof title company emails and redirect the wire.
Always call the escrow agent on a number you obtained independently. Verify the wiring instructions verbally.
Never trust instructions that arrive by email, even from an address you recognize. Changed instructions are almost always fraud.
Practical advice
Verify wiring instructions by phone on a number you looked up yourself.
Diary every contract deadline the day you sign.
Keep your contingency periods realistic rather than short to win the offer.
If a dispute happens
Neither side can unilaterally claim the funds. The escrow agent needs written agreement or a court order.
Most disputes settle. Litigating a $10,000 deposit rarely makes economic sense for either party.
Document everything in writing from the start, and the dispute usually does not arise.
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.