What happens to my earnest money deposit?

Good morning Nick. Many real estate firms in Florida have escrow funds held by a title company to avoid any potential problems. One major national franchise with company owned offices maintains their own escrow account. Great explanation. Enjoy your day. 

Good morning Nick,

Good explanation about the earnest money and where it goes. It just shows how different states practice real estate. Our Title companies are the keeper of the earnest and option money in their secure accounts. They disperse funds to the sellers and all parties at closing and collect the money from the buyer and the lender so we never touch the funds...I like it that way!

So different, Nick, from how earnest money works in the Carolinas. And as we are due diligence states, I primarily care about the due diligence fee and not very much about earnest money. Even before we were due diligence states here in the Carolinas it was rare to see earnest money at more than 1% of purchase price. I was shocked when we purchased our first home here and all we put down on a $595,000 purchase was $5,000, as in NY City the standard was 10%.

In our state, funds can be released with mutual consent with signatures on a release form. If the seller balks, the property cannot go back as active until funds are returned.

Thanks Nick for sharing some great info on Ernest money!!!

Escrow deposits are held in an escrow account for safety and there are strict regulations about when and how the funds can be released. The deposit when a sale goes to settlement is brought to settlement as part of the buyers funds, going towards their deposit or closing costs.

Hello Nick - for buyers, especially those who haven't done it before or for a while, the withdrawals of funds never seem to stop.   While there are reasons, in reality, it's a process that continues as a property owner.  Hopefully with far more benefits along the way.  

This is a very good discussion about the earnest money deposit.  With an experienced agent like yourself representing them, there is very little chance that they lose their earnest money deposit.

Happy Valentines Day. Thanks for sharing, make it a great Friday and enjoy your weekend!

Bill Salvatore, Realtor- Arizona Elite Properties

Excellent post. And since it varies from state to state (heck even market to market within states), we should all be doing educational posts like this. 

Either the brokerage holds the funds or a title company here, Nick. Depends on whether it is cash or if a mortgage is required. This is so important for buyers and sellers to know and fully understand!

Hope your Valentines Day was memorable!

This is good information to share with home buyers and home sellers.

I hope you are enjoying the weekend. We have a rainy afternoon in Maryland.