Complete Earnest Money Guide
Written by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
Earnest money is a deposit you put down when making an offer to show the seller you are serious. It is held in escrow and applied to your purchase at closing, but it can be at risk if you back out improperly.
This guide explains how earnest money works, how much to offer, and how to protect it in Florida. Mortgage Capital, NMLS# 1859012, helps Florida buyers understand their deposit.
What earnest money is
Earnest money is a good-faith deposit submitted with your offer, signaling commitment. A neutral party, usually the title company or broker, holds it in escrow until closing.
At closing, the deposit applies toward your down payment and closing costs, so it is not an extra cost, just paid early.
How much to offer
Earnest money typically runs 1% to 3% of the purchase price, though competitive Florida markets may call for more to strengthen your offer.
A larger deposit signals seriousness, but only offer what you can afford to commit while your contingencies protect it.
Contingencies protect your deposit
Standard contingencies for financing, appraisal, and inspection let you cancel and recover your earnest money if those conditions are not met within the agreed timeframes.
Staying within your contingency periods is how you keep your deposit safe if a deal falls through.
When you can lose it
You risk losing earnest money if you back out for a reason not covered by a contingency, miss your deadlines, or simply change your mind after contingencies expire.
Read the contract's timelines carefully so you do not forfeit your deposit by missing a date.
Earnest money in Florida
In Florida, the deposit is held per the purchase contract, and disputes over its release follow the contract and state rules. Clear contingencies and deadlines are your protection.
We coordinate the financing timeline so your financing contingency aligns with your loan, protecting your deposit.
Complete Earnest Money Guide: step by step
Frequently asked questions
What is earnest money?
A good-faith deposit submitted with your offer, held in escrow and applied to your purchase at closing.
How much earnest money should I offer?
Typically 1% to 3% of the price, though competitive Florida markets may call for more to strengthen your offer.
Is earnest money an extra cost?
No. It applies toward your down payment and closing costs at closing, so it is paid early, not added.
Can I get my earnest money back?
Yes, if you cancel within a valid contingency for financing, appraisal, or inspection before its deadline.
When can I lose my earnest money?
If you back out for a non-covered reason, miss your deadlines, or change your mind after contingencies expire.
Who holds the earnest money?
A neutral party, usually the title company or broker, holds it in escrow until closing.
Does a bigger deposit help my offer?
Yes. A larger deposit signals seriousness, which can strengthen your offer in a competitive market.
How does earnest money work in Florida?
It is held per the purchase contract, with contingencies and deadlines determining whether you recover it if the deal ends.