Part 15 of our 25-part Seller Series for UK homeowners selling Florida vacation homes.
Understand how Florida real estate escrow deposits work, including how much buyers pay, where funds are held, refunds, forfeiture and what happens at closing.
What Is An Escrow Deposit And Why Does It Matter?
If you’re selling your Florida vacation home, you may hear the term Florida real estate escrow deposit very early in the transaction. For UK homeowners, particularly those selling a property from overseas, it can be helpful to understand exactly what this deposit means and the protection it can provide during the sale.
An escrow deposit is essentially a good-faith gesture from the buyer. It demonstrates their commitment to purchasing your property and, once paid, is held securely while the transaction progresses towards closing.
In this video of our Seller Series, we explore how escrow deposits work, including how much a buyer may pay, where the money is held, when it may be refunded and the circumstances in which it could potentially be forfeited. You can watch the full video above, or continue reading below for the written version — perfect if you prefer to skim through the highlights at your own pace.
1. What Is A Florida Real Estate Escrow Deposit?
An escrow deposit is a monetary good-faith gesture made by the buyer of a property. You can think of it as an indication of how serious or committed the buyer is about proceeding with the purchase.
The escrow deposit forms part of the sale and purchase contract and can become particularly important if the transaction does not ultimately reach closing.
2. Where Is The Escrow Deposit Held?
On most transactions, the escrow deposit is held in the bank account of the closing agent.
This will usually be the title company or attorney’s office responsible for preparing the title work and ensuring that the closing documents are correctly signed by both the buyer and seller.
The money is therefore not simply handed directly to the seller when the buyer goes under contract.
3. How Much Is An Escrow Deposit?
There is no single amount that applies to every transaction.
Escrow deposits vary depending upon the motivation of the buyer and the wishes of the seller. In general, an escrow deposit may be no less than $1,000 and is frequently around 1% of the contract price, although there is no upper limit.
The amount offered can therefore be one factor for a seller to consider when comparing offers from different buyers.
4. When Is An Escrow Deposit Due?
The sale and purchase contract will state the amount of the escrow deposit, who will hold it and the deadline by which it must be paid.
A common timeframe is within three days of the signed contract, although the buyer and seller may agree to a shorter or longer period and specify this in the contract.
If the deadline falls on a weekend or Federal holiday, the deadline is extended to the next business day.
5. How Does The Buyer Pay The Escrow Deposit?
One of the simplest and fastest ways for a buyer to make an escrow deposit is by wiring the funds to the closing agent’s bank account after receiving the appropriate wiring instructions.
A local buyer may instead deliver a cheque or money order to the closing agent’s office. A buyer can also send a cheque or money order using an overnight delivery service that allows the package to be tracked.
Closing agents generally do not accept cash, which reduces the need to maintain high levels of cash security within their offices.
6. What Happens To The Escrow Deposit At Closing?
If the transaction proceeds successfully from contract through to closing, the Florida real estate escrow deposit is credited towards the buyer’s funds required to close.
When the closing agent calculates the final amount the buyer needs to bring to closing, the escrow deposit already paid is taken into account.
In other words, it is not an additional charge on top of the buyer’s purchase costs. It becomes part of the funds the buyer is contributing towards the transaction.
7. When Can An Escrow Deposit Be Refunded?
A sale and purchase contract may contain several contingencies depending upon the buyer’s circumstances. These could include inspection, financing, appraisal or house-sale contingencies.
In communities where a buyer must receive approval from the Homeowners’ Association before closing, HOA approval may also be included as a contingency.
These contingencies will usually have deadlines. If a particular contingency cannot be satisfied, the buyer may be able to request the return of the escrow deposit by submitting the appropriate cancellation of contract and release of deposit documentation before that contingency expires.
Once escrow funds have been deposited, the closing agent cannot simply move the money at the request of one party. Written consent from both the buyer and seller is required.
👉 If you’d like to learn more about what happens during the inspection period, take a look at Blog 16 in our Seller Series covering Home Inspections And Surveys. (Add internal link once published.)
8. When Could A Buyer Forfeit The Escrow Deposit?
A buyer could potentially be at risk of forfeiting the escrow deposit if they fail to close for a reason that is not protected by one of the contingencies in the contract, or after the relevant contingency has expired.
However, that does not mean the seller automatically receives the money.
If the buyer and seller disagree about who is entitled to the deposit and do not both sign a cancellation of contract and release of deposit form authorising its release, an escrow dispute can arise.
At that point, an independent party may need to determine how the deposit should be handled based upon the sequence of events and the terms of the contract.
This is one reason why understanding the deadlines and requirements contained within a real estate contract is so important for both sellers and buyers.
9. Do The Real Estate Offices Receive Any Of A Forfeited Deposit?
The listing documents completed when a property is placed on the market contain provisions addressing what happens if the seller is awarded a forfeited escrow deposit.
Under those provisions, the deposit may be shared to some degree with the listing agent’s office.
The sale and purchase contract also contains a provision whereby any portion of a forfeited deposit given to the listing agent’s office must also be shared with the buyer’s agent’s office.
Understanding Escrow When Selling Your Florida Home
For a seller, an escrow deposit can provide an indication of a buyer’s commitment to the transaction, but it is important to remember that the money remains subject to the terms of the sale and purchase contract.
The amount of the deposit, deadlines, contingencies and circumstances surrounding any cancellation can all affect what ultimately happens to those funds.
For UK homeowners selling from overseas, having an experienced real estate team keeping track of these dates and explaining each stage can make the process considerably easier to navigate.
Thinking About Selling Your Florida Home?
If you’re a UK homeowner thinking about selling your Florida home, feel free to reach out — we’d be happy to chat.
Cell: 321-443-7535
Email: TheAistropTeam@gmail.com
About The Authors
Irena and Suzanne Aistrop are a UK mother-and-daughter real estate team based in Central Florida. With over 40 years of combined experience, they specialize in helping UK homeowners sell their Florida vacation homes with ease — even while remaining abroad. Known for their hands-on service, clear communication, and deep understanding of both sides of the Atlantic, they guide clients through every step of the process with professionalism and care.
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