Earnest Money: What It Costs You and When You Lose It

What Earnest Money Actually Is and How Much It Costs

Earnest money is the deposit a buyer wires into escrow within a few days of a seller accepting their offer. It proves the buyer is serious, and it sits with a neutral third party, usually a title company or the closing brokerage, until the sale closes or the deal collapses. Neither the buyer nor the seller can touch it alone. Release requires a signed agreement from both sides, or a ruling from arbitration or a court if they can't agree.

The typical deposit runs 1% to 3% of the purchase price, climbing to 10% in a competitive market, according to data reported by Zillow and Rocket Mortgage. On Florida's statewide median single-family home price of $420,000, reported by Florida Realtors for March 2026, that puts a normal earnest money deposit between $4,200 and $12,600. That money gets credited toward the buyer's down payment or closing costs at the closing table. It is not an extra cost stacked on top of the purchase price.

When Earnest Money Is Forfeited, and What Happens When Buyer and Seller Disagree

Earnest money is refunded to the buyer when the deal falls apart for a reason the contract protects: a failed inspection inside the inspection window, a denied loan while a financing contingency is still active, or a low appraisal. It is forfeited to the seller when the buyer walks away after those contingency deadlines pass, or backs out for a reason the contract does not cover.

Florida law does not leave that call to a handshake. Under Florida Statute 475.25(1)(d), a broker holding disputed earnest money must notify the Florida Real Estate Commission within 15 business days of a conflicting demand, then resolve the dispute within 30 business days through an escrow disbursement order, arbitration, mediation, or a court interpleader action. That is a real deadline with a real state agency attached, not boilerplate contract language.

The deposit also has to reach escrow in the first place, usually by wire transfer, and that step carries its own risk. The FBI's Internet Crime Complaint Center recorded 12,368 real estate fraud complaints in 2025, totaling $275.1 million in losses, much of it wire fraud aimed at buyers sending closing and earnest money funds to a spoofed account. A forfeited deposit is a contract problem. A wired deposit stolen by a scammer is gone regardless of what the contract says.

Why a Florida Seller Shouldn't Rely on Earnest Money as Their Only Protection

A forfeited earnest money deposit sounds like a safety net, but run the math on what it actually replaces. A $4,200 to $12,600 deposit does not cover 30 to 45 more days with the house off the market, a second round of buyer inspection requests, or the mortgage and insurance payments a seller keeps making while waiting for a new buyer. The deposit compensates for the buyer's broken promise. It does not compensate for the seller's lost time.

Cash Flow Deals is a Florida real estate investor that locks in a net price for a seller's house before repairs are scoped, using a novation-based, flat-fee process arranged through its licensed FL brokerage partner, Silver Door Realty — not a traditional listing, and not a brokerage itself.

Here is that process in three steps:

1. Cash Flow Deals locks your net price in writing before any inspection happens, so there is no repair renegotiation and no buyer financing contingency hanging over the deal.

2. Silver Door Realty, CFD's licensed FL brokerage partner, handles the novation-based paperwork that connects the sale to a real end buyer.

3. The sale closes in as little as 10 business days, at the number already agreed to, with no earnest money dispute to manage because there is no buyer financing chain sitting in the way.

A traditional listing puts the entire safety net on one buyer's earnest money deposit and nothing else. If financing falls through in month two of a 45-day closing, the seller is back to square one with only a percentage of the price to show for the lost time. Cash Flow Deals removes that single point of failure by removing the financing chain itself.