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 your house off the market, a second round of buyer inspection requests, or the mortgage and insurance payments you keep making while waiting for a new buyer. The deposit compensates for the buyer's broken promise. It does not compensate for your lost time.

With Cash Flow Deals, you choose between the Fast Cash Offer, where we buy your house as-is and close, and the Premium Cash Offer, where a pre-approved FHA or conventional buyer we already have, ready to go, pays more and buys directly from you. On Premium, your home may be listed through Silver Door Realty, a licensed Florida brokerage, with a licensed agent and scheduled showings. Your buyer signs a new contract directly with you, their lender funds the purchase, and title transfers directly from you to them. We are paid as a separate line item on the closing statement.

We cover repair costs, and we figure out a way, so nothing comes out of your pocket. On Premium, only what your buyer's lender requires gets fixed, with repair costs settled from the sale proceeds out of our share. With Fast Cash, we buy as-is, so you have no repairs to make. The number is agreed before any work starts, and it changes only if you agree. The one exception: if something structural surfaces that was not visible or disclosed before we signed — foundation issues, hidden moisture, old wiring, cast-iron drain failure — we re-cost it and bring the number back to you. You decide. You can walk away. We disclose what we know at offer time so this almost never happens.

You help pick the closing date. A sale closing in 45 days or less still needs a clear plan for financing risk. If financing falls through in month two of a 45-day closing, an earnest money deposit alone may leave you starting over. With our Premium Cash Offer, if your buyer's loan falls through, that is our problem, not yours. You can still choose the Fast Cash Offer at its own number.