Buying in Florida City and not sure what to do with that first deposit request? Earnest money is one of the first dollars you move, and it sets the tone for the whole deal. If you understand how it works in Miami-Dade, you can protect your money, write stronger offers, and avoid costly mistakes. This guide walks you through amounts, deadlines, contingencies, and disputes so you can move with confidence. Let’s dive in.
What earnest money is
Earnest money, also called an escrow deposit or good-faith deposit, is the upfront money you put down to show you intend to complete the purchase. It is not a fee. If you close, it becomes part of your down payment and closing costs.
The deposit gives the seller confidence and can partially protect the seller if a buyer defaults under the contract. It also ensures there are funds in place while inspections, title work, and other steps move forward.
Who holds it and when you pay in Florida
Your contract will name the escrow holder. In Miami-Dade, that is commonly the listing broker’s escrow account, a title company, or a real-estate attorney’s escrow account.
Most offers in our area use the Florida Realtors and Florida Bar residential contract. Under common practice with that form, you deliver the deposit within a short period after the effective date, often three business days, unless you negotiate a different timeline.
Florida brokers who hold escrow must follow strict trust-account rules, keep funds separate, keep accurate records, and follow prompt disbursement procedures. Always get a written receipt and note the amount, date, and how you paid, such as wire or cashier’s check.
How much earnest money in Miami-Dade
There is no fixed legal amount. Norms depend on price point and competition.
- Entry-level homes and condos under about 300,000 to 400,000 dollars: often 1,000 to 5,000 dollars, or about 0.5% to 2% of the price.
- Mid-price homes from about 400,000 to 1 million dollars: often 5,000 to 25,000 dollars, or roughly 1% to 3%.
- Higher-priced properties above 1 million dollars: commonly 2% to 5% or more.
In hotter Miami-Dade submarkets or multiple-offer situations, buyers may put up larger deposits or make portions non-refundable to stand out. Florida City can be less aggressive than coastal Miami, but each listing is different. Ask the listing agent what they expect for that specific property.
Contingencies that protect your deposit
Contingencies are your safety nets. If you cancel within the terms of a contingency, your earnest money is usually returned.
Inspection contingency
Most buyers negotiate a defined inspection period, often 7 to 15 days, but the timeline is negotiable. You can inspect, request repairs or credits, or cancel. If you cancel within the inspection timeline and follow the contract notice steps, the deposit is typically refunded.
Financing contingency
If you are getting a loan, your contract can include financing terms that protect you if the loan does not get approved. You will have deadlines for making your loan application and for obtaining approval, often 30 to 45 days. If you act on time and cannot obtain financing under the contract terms, you can usually cancel and recover your deposit.
Appraisal contingency
If the appraisal comes in below the purchase price and you have an appraisal contingency, you can often cancel within the contingency period or renegotiate. If you cancel on time, the deposit is typically returned.
Title and survey
You will have the right to review title and survey. If issues arise, the seller may have a period to cure. If the defect is not cured and the contract allows you to cancel, the deposit is usually returned when you cancel properly.
HOA and condo review
For condos and HOA communities, you often have set review and rescission rights. If you act within the allowed time and cancel correctly, your deposit is protected under the contract.
Sale-of-buyer-home contingency
If your purchase depends on selling your current home, your contract can include dates and conditions tied to that sale. Your deposit protection depends on following those timelines and notice rules.
Waiving contingencies raises risk
In competitive offers, buyers sometimes shorten or waive contingencies and increase the deposit. That can win the house, but it raises the chance you could forfeit your earnest money if you default later. Know the tradeoffs before you decide.
Miami-Dade timelines at a glance
While every contract is negotiated, here is a common flow for financed buyers in Florida City and across Miami-Dade:
- Day 0: Effective date. Contract is signed by both parties.
- Days 1–3: You deliver earnest money to the named escrow holder.
- Day 1: You submit your loan application.
- Days 1–10: You complete inspections during your inspection period.
- Days 30–45: Financing approval deadline under many contracts.
- Days 45–60: Target closing for many financed deals.
Cash purchases often move faster, sometimes with 10 to 14 day closings and larger deposits, and may include limited or non-refundable terms after the inspection period.
Real-world examples in Florida City and beyond
First-time buyer with a loan
- Purchase price: 420,000 dollars
- Earnest money: 5,000 dollars, about 1.2%
- Key terms: Deposit due within three business days, 10-day inspection, 30 to 45 day financing period, 45 to 60 day closing.
If inspections reveal issues, you can request repairs or credits. If you cancel within the inspection period or fail to obtain financing within the contingency timeline and give proper notice, your deposit is typically refunded. At closing, your deposit is applied to your down payment and costs.
Multiple offers on a condo
- Purchase price: 350,000 dollars
- Earnest money: 15,000 dollars, about 4.3%
- Key terms: Five-day inspection, limited appraisal contingency, 30 day financing.
A larger deposit and shorter timelines can make your offer stand out. If you later default after contingencies expire, the seller may be entitled to keep the deposit as liquidated damages if your contract includes that remedy.
Cash investor, quick close
- Purchase price: 600,000 dollars
- Earnest money: 30,000 dollars, about 5%
- Key terms: 10 to 14 day closing, minimal contingencies, deposit may become non-refundable after inspection.
This strategy can secure a property quickly. Be sure you are comfortable with the risk if you give up deposit protections.
If things go sideways: disputes and remedies
Many Florida contracts include a liquidated damages clause. If a buyer defaults, the seller may keep the earnest money as the sole remedy. Some parties choose different remedies, such as specific performance.
If a seller defaults, buyers usually get their deposit back and may have other remedies based on the contract. If buyer and seller both demand the deposit, the escrow holder can ask for written agreement from both sides. If they cannot agree, the escrow holder may use an interpleader action or seek court direction. That adds time and cost and shifts the decision to a judge.
Your contract may include notice and cure periods before a default is final. Whether the deposit gets released often hinges on whether notices were given on time and in the proper format.
Best practices for buyers
- Deliver funds by wire or cashier’s check and get a written receipt with the escrow account name.
- Calendar every deadline: inspection, financing, appraisal, title, and HOA review. Send notices on time and in the form your contract requires.
- Keep everything: inspection reports, lender letters, and all notice emails.
- Match your deposit and contingencies to local competition. Bigger deposits and shorter timelines can help in Miami-Dade, but know the risk if protections are waived.
Best practices for sellers
- Confirm who holds escrow and verify that funds are received and cleared.
- Use clear contract language for remedies and dispute resolution, including liquidated damages and any mediation steps.
- If there is a conflict over the funds, follow the contract and your escrow holder’s procedures before authorizing any release.
For both sides
- Use standard Florida forms that are widely accepted, such as Florida Realtors and Florida Bar contracts.
- Know the difference between refundable and non-refundable deposits. Refundability often depends on whether contingencies remain in place.
- Consider using a title company or attorney for escrow on complex deals, such as condos, tight closings, or multi-party transactions.
Special notes for relocating and military buyers
Relocating on a tight timeline? Set your inspection and financing periods to match your move plan, and deliver your earnest money in a traceable form so you can verify receipt from out of state. If you are using a loan, lock in your financing timeline early and keep your lender and agent synced on appraisal and HOA review dates.
If you are PCSing or using VA financing, lean on your agent to calendar each contingency and to confirm HOA and condo documentation arrives quickly. Your earnest money protection depends on acting within the contract windows and sending proper notices.
Ready to move forward in Florida City?
When you understand how earnest money works, you write cleaner offers, protect your deposit, and close with less stress. If you want clear advice on deposit amounts, timelines, and negotiation strategy for a Florida City purchase or sale, reach out to Lindsey Bergeron for a straightforward plan and concierge support.
FAQs
When is earnest money due in Florida City purchases?
- In Miami-Dade, common practice with widely used Florida contracts is within about three business days of the effective date, unless you negotiate a different deadline.
How much earnest money should I offer in Miami-Dade?
- Entry-level homes often see 1,000 to 5,000 dollars or about 0.5% to 2%, mid-price homes 1% to 3%, and higher-priced properties 2% to 5% or more, adjusted for competition.
Can I get my earnest money back if I cancel after inspections?
- Yes, if your contract has an inspection period and you cancel properly within that window, the deposit is typically refunded.
What if my appraisal comes in low in Miami-Dade?
- If you have an appraisal contingency and act within the deadline, you can cancel and recover your deposit or try to renegotiate the price.
Who holds the earnest money in South Florida deals?
- The contract names the escrow holder, often the listing broker, a title company, or a real estate attorney’s escrow account.
What happens if buyer and seller both claim the deposit?
- The escrow holder may require a written agreement to release funds or file an interpleader action for a court to decide, which adds time and cost.
