Earnest Money in Florida: What Buyers Should Know

Thinking about making an offer on a Downtown Pensacola home or condo? Your earnest money, the good‑faith deposit that accompanies your contract, can help your offer stand out and protect you when used correctly. If you are buying your first place or moving up, it is normal to wonder how much to put down and what happens if plans change. In this guide, you will learn how earnest money works in Florida, what is typical in Downtown Pensacola, how to keep your funds safe, and when you could lose it. Let’s dive in.

Earnest money basics

Earnest money is a good‑faith deposit you submit after a seller accepts your offer. It shows you are serious about closing and is credited to your down payment or closing costs at settlement. It is not an extra fee, but it can be at risk if you default under the contract.

Your purchase contract will state the amount, who holds the funds, when you must deposit, and how disputes are handled. In Florida, these details are built into the standard contracts used by most buyers and sellers.

Typical amounts in Downtown Pensacola

Downtown Pensacola includes condos, historic homes, and higher‑priced listings compared with some surrounding areas. The amount you offer often reflects price point and competition. Local practice generally follows these guidelines:

• Lower‑priced homes and condos under $200,000: often $500 to $2,500.
• Mid‑range $200,000 to $400,000: often $2,000 to $5,000.
• Higher‑priced homes above $400,000: often 1% to 2% of the purchase price.

In very competitive downtown listings, sellers may expect a larger deposit or faster delivery. Use these ranges as a starting point and adjust for the property type, your financing strength, and the number of competing offers.

When and where to deposit

Florida contracts typically require you to deposit earnest money within a set period after the effective date of the contract. In practice, you will often see a deadline of 1 to 3 business days. Always confirm the exact deadline in your contract.

Most Florida buyers deposit with the named title company or closing agent. Brokers sometimes hold funds in escrow, but title companies are common. You should receive a written receipt and keep it with your records.

How your funds are protected

Florida’s contracts and escrow rules are designed to safeguard funds when everyone follows the process. To keep your deposit secure:

• Name the escrow holder in the contract and verify their details.
• Use the deposit method your contract allows, such as a wire, certified funds, or check.
• Call a known company number to confirm wire instructions and avoid fraud.
• Get a written deposit receipt from the escrow holder.
• Make sure contingency timelines and disbursement instructions are clear in the contract.

Contingencies that protect you

Contingencies are your main protection. If you cancel within a valid contingency period and give proper notice, you generally keep your earnest money. Common protections include:

• Inspection period: often 7 to 15 days in local practice, giving you time to inspect, request repairs, or cancel within the window.
• Financing contingency: if your loan is not approved by the stated deadline, you can cancel and seek a deposit return.
• Appraisal contingency: helps if the appraisal comes in low and financing fails.
• Title and HOA or condo documents: important for Downtown Pensacola condos, where you may have a short review period to rescind if materials reveal issues.
• Survey or environmental contingencies when relevant.

To use these effectively, track deadlines, act early, and follow the contract’s notice requirements in writing.

What can cause forfeiture

You risk losing some or all of your deposit if you default under clear contract terms. Common causes include missing contingency deadlines and canceling without a contractual right, or failing to close when the seller is ready and able to perform as agreed.

You typically keep your money if you cancel during an active contingency period and provide proper notice, or if the seller cannot meet their obligations and you cancel correctly. Timeframes matter, so document everything and communicate in writing.

How disputes are resolved

Escrow holders usually will not release funds without a mutual release, a court order, or a contract‑specified process. Many contracts call for mediation or allow an interpleader action, where the escrow holder deposits funds with the court. Because legal action can be costly, many parties resolve disputes through negotiation or mediation before going to court.

How much should you offer?

Aim to be competitive without overreaching. For higher‑priced or in‑demand downtown listings, 1% of the price is a practical starting point. For lower‑priced homes, a flat $1,000 to $2,500 is often sufficient. If you need stronger protections, a smaller deposit can still work, but understand that some sellers view very small deposits as weaker offers.

Your agent can help you balance amount, speed of deposit, and contingency terms so your offer is both attractive and protected.

Step‑by‑step after contract acceptance

1. Review your contract for the deposit amount, escrow holder, and deadline.
2. Send your deposit to the named escrow holder within the timeframe by the approved method.
3. Get and save your escrow receipt.
4. Start inspections and your loan process immediately, and track all deadlines.
5. If an issue arises, send written notice within the allowed window.
6. If you cancel under a contingency, follow the contract’s process and request the earnest money return in writing.

When to involve an attorney

Consider legal counsel if the deposit is large relative to your assets, the contract language is unclear or favors the seller, deadlines were missed, or a dispute is brewing. Experienced agents and title companies handle routine escrow steps, but an attorney is the safest choice if significant money is at risk.

Work with a local team you can trust

Navigating earnest money gets easier when you have a clear plan, firm timelines, and strong communication. Our local team pairs data‑informed guidance with reliable transaction coordination so you can write a clean offer, protect your deposit, and move forward with confidence. If you are planning to buy in Downtown Pensacola, we are here to help you structure a competitive offer that fits your goals.

Ready to take the next step? Connect with Team Bruce Baker, MBA - RE/MAX Infinity for local guidance and a smooth path to closing.

FAQs

What is earnest money in a Florida home purchase?

• It is a good‑faith deposit you provide after a seller accepts your offer, credited to your closing if the sale proceeds, and at risk if you default under the contract.

How much earnest money is typical in Downtown Pensacola?

• Lower‑priced homes often see $500 to $2,500, mid‑range $2,000 to $5,000, and higher‑priced properties commonly 1% to 2% of the price, adjusted for competition.

When is earnest money due after an offer is accepted in Florida?

• Florida contracts often require deposit within 1 to 3 business days of the effective date, but you should follow the exact deadline in your contract.

Who usually holds the earnest money in Pensacola transactions?

• Title companies or closing agents commonly hold funds in escrow, and you should receive a written receipt after you deposit.

Which contingencies protect my earnest money in Downtown Pensacola?

• Inspection, financing, appraisal, and title or condo document review periods are common protections when you act within deadlines and give proper written notice.

What happens if the buyer and seller cannot agree on releasing earnest money?

• Escrow holders typically require a mutual release, mediation or arbitration if provided in the contract, or a court order such as an interpleader action before disbursing funds.