What Is an Escrow Deposit?

An escrow or earnest money deposit is the norm when making an offer on a house. But many buyers ask me, how much should it be for, and who should hold the money? Here is what you need to know. 

The escrow amount should be specified in your offer on a house to show the seller that you are serious about purchasing the home. Once the offer is accepted you must deposit the money within the timeframe specified in the contract, usually 3 days after accepted.

The escrow deposit is held by a third party, usually a title company, and it becomes part of the down payment, or is forfeited if you pull out of the deal for reasons other than those stipulated in the offer. A financing contingency is an example of the latter. If your offer was contingent on getting a loan, and you can't, you can cancel the contract and get your earnest money deposit back.

 

How Much Should You Deposit? 

The size of the escrow deposit is up to you. Real estate agents will sometimes tell you it is this or that amount, or this or that percentage of the offering price. In reality, you can write the offer with a one dollar deposit if you wish, and the agent still has to present the offer.

Naturally, an offer with one dollar of earnest money may not be taken seriously, and the listing agent may even persuade the seller to reject your offer. It is a good idea to ask what the local norm is.

 

Who Gets the Earnest Money Deposit?

Never give your earnest money check to the seller. The last thing you want is a seller trying to keep your money after you pull out of a deal because of financing problems, termite infestations or other valid contingencies in your offer. In Central Florida, escrow deposit is usually deposit to a title company chosen by the seller who acts as an intermediary. In any case, always give your deposit to a third party to hold. 

 

How Your Realtor May Protect You?

Things can happen, right? If you pull out of the deal for some unforeseen reason, not included in the contract, you'll lose your deposit. However, the seller could also sue you for additional damages or even force you to buy the home. In order to protect you, your Realtor will add contingencies in the contract indicating a period of time for home inspection and loan approval, in which you can pull out of the contract if you can’t get a loan or if you find unexpected defects in the property.

 

852 Properties Found. Showing 1-12
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1420 Brookebridge Drive
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1420 Brookebridge Drive Orlando, FL 32825
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2
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2
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958
BUILT
1994
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S5009821
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9050 Oak Moss Drive
Orlando, FL 32832
9050 Oak Moss Drive Orlando, FL 32832
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2
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5130 Brightmour Circle
Orlando, FL 32837
5130 Brightmour Circle Orlando, FL 32837
 
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BEDS
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3
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BUILT
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Welcome to your new home! This beautifully maintained 4 bedroom, 3 bath with a study is full of upgrades! Located in desirable Hunter's Creek, this split floor plan features volume ceilings with...
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Orlando, FL 32837
14357 Windchime Lane Orlando, FL 32837
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3
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2,738
BUILT
1990
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418 E Gore Street
Orlando, FL 32806
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Solid home in a great Delaney Park location. Original features include wood floors, plaster walls and wood burning fireplace. Large kitchen area with eating space, laundry and half bath. Bonus...
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2372 Silver Palm Drive Kissimmee, FL 34747
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Subdivision: Windsor Palms Twnhms Ph 3A
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3
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1,440
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This fantastic townhome is certainly the best in Windsor Palms. Extensively upgraded and professionally furnished and decorated throughout, the many great features of this home include new ceramic...
6422 Edge O Grove Circle
Orlando, FL 32819
6422 Edge O Grove Circle Orlando, FL 32819
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$294,900
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3
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2
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1,536
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1982
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Welcome to the heart of Dr. Phillips, Orange Bay! Just minutes from restaurant row, theme parks, A rated schools, and other area attractions! This beautifully kept and recently remodeled home is sure...
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Orlando, FL 32818
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3
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Family friendly neighborhood!! Great price on this home with 3 bedrooms and 2 baths. Centrally located close to malls, restaurants, shopping, major roads and attractions. Roof is two years old, A/C...
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Kissimmee, FL 34746
1000 Marcello Boulevard Kissimmee, FL 34746
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1,647
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