Do You Make an Earnest Money Deposit When You Buy Land in Florida?

When you buy land in North Florida, whether it’s timberland, a cattle ranch, a large farm or something else, do you make an earnest money deposit? This guide explains.

When you buy property in North Florida, it’s customary to come up with an earnest money deposit. An earnest money deposit is a buyer’s way of showing a seller that they’re serious about making the purchase.

You don’t give your earnest money deposit directly to the seller. Instead, you give it to your real estate agent, who puts it in an escrow account to be held until the transaction is complete.

If you walk away from the deal for a reason not covered in your real estate purchase contract, you forfeit your earnest money deposit. In that case, the seller gets to keep it for the inconvenience of taking their property off the market for you.

Related: What’s a land contract?

How Much is an Earnest Money Deposit?

An earnest money deposit is typically between 2 and 5 percent of the land’s sales price. For example, if you’re purchasing a piece of land for $100,000, your earnest money deposit could be between $2,000 and $5,000.

What Happens to Earnest Money?

You don’t usually get your earnest money deposit back In the form of cash, but it may be applied towards your closing costs or your down payment. In some cases, you can receive your earnest money deposit back after closing.

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