In Florida, earnest money is a deposit that demonstrates a buyer’s commitment to purchasing a property. It must be deposited in an approved depository, ensuring the safekeeping of funds until the transaction’s completion.
Key Facts
- Approved Depositories:
- Banks: Major banks such as Bank of America, Wells Fargo, and Chase are approved depositories for earnest money.
- Credit Unions: Many credit unions in Florida, like Suncoast Credit Union and VyStar Credit Union, are also approved depositories.
- Savings and Loan Associations: Institutions like the First Federal Bank of Florida and the Community First Credit Union are approved depositories.
- Trust Companies: Trust companies such as Northern Trust and Brown Brothers Harriman are approved depositories in Florida.
- Title Companies: Title companies like Fidelity National Title and Old Republic National Title Insurance Company can also act as approved depositories.
- Law Firms: Some law firms in Florida are approved depositories for earnest money.
- Escrow Companies: Escrow companies such as Sunshine State Escrow and Florida Title & Escrow are approved depositories.
- Real Estate Brokers: In certain cases, real estate brokers can also act as approved depositories.
- Mandatory Deposit: In the state of Florida, it is mandatory to deposit earnest money in an approved depository.
- Amount of Earnest Money: The amount of earnest money is negotiable between the buyer and seller and is typically a percentage of the purchase price.
- Refundability: The refundability of earnest money depends on the terms of the purchase agreement. It is important to carefully review the contract before depositing earnest money.
List of Approved Depositories
- BanksBank of America, Wells Fargo, Chase
- Credit UnionsSuncoast Credit Union, VyStar Credit Union
- Savings and Loan AssociationsFirst Federal Bank of Florida, Community First Credit Union
- Trust CompaniesNorthern Trust, Brown Brothers Harriman
- Title CompaniesFidelity National Title, Old Republic National Title Insurance Company
- Law FirmsSelect law firms approved by the state
- Escrow CompaniesSunshine State Escrow, Florida Title & Escrow
- Real Estate BrokersIn certain circumstances, real estate brokers may act as depositories
Mandatory Deposit
In Florida, depositing earnest money in an approved depository is mandatory.
Amount of Earnest Money
The amount of earnest money is negotiable between the buyer and seller. It typically represents a percentage of the purchase price.
Refundability
The refundability of earnest money is determined by the purchase agreement’s terms. A thorough review of the contract is crucial before depositing earnest money.
Sources
FAQs
What is an approved depository for earnest money in Florida?
An approved depository is a financial institution or other entity authorized by the state of Florida to hold earnest money deposits for real estate transactions.
Which institutions are approved depositories for earnest money in Florida?
Approved depositories include banks, credit unions, savings and loan associations, trust companies, title companies, law firms, escrow companies, and real estate brokers (in certain cases).
Is it mandatory to deposit earnest money in an approved depository in Florida?
Yes, it is mandatory to deposit earnest money in an approved depository in Florida.
How much earnest money should I deposit?
The amount of earnest money is negotiable between the buyer and seller and is typically a percentage of the purchase price.
Is earnest money refundable?
The refundability of earnest money depends on the terms of the purchase agreement. It is important to carefully review the contract before depositing earnest money.
What happens if I don’t deposit earnest money in an approved depository?
Failure to deposit earnest money in an approved depository may result in legal consequences and/or the loss of your earnest money.
Can I choose any approved depository to hold my earnest money?
Yes, you can choose any approved depository, as long as both the buyer and seller agree.
What are the benefits of using an approved depository for earnest money?
Using an approved depository provides security and protection for your earnest money, ensuring that it is held in a safe and accessible location until the closing of the real estate transaction.