Earnest Money Basics for Florida Homebuyers

Are you wondering how much earnest money you need to buy a home in Panama City or Bay County? If you are a first-time or out-of-state buyer, it can feel confusing to wire thousands of dollars right after your offer is accepted. You want to protect your money, make a strong offer, and understand your rights if something goes wrong. In this guide, you’ll learn how earnest money works locally, what amount is typical, when it is due, when it is refundable, and coastal considerations that matter in Florida. Let’s dive in.

What earnest money is

Earnest money is a good-faith deposit you provide when your offer is accepted. It shows the seller you are serious and will be applied to your purchase price or closing costs at closing. It is not a separate fee. If the sale closes, it becomes part of your transaction.

A neutral escrow holder keeps your deposit safe. In Florida, that is typically a title company, closing agent, or an attorney’s escrow account. Your real estate agent does not hold the money. You will receive a receipt and confirmation from the escrow holder once your funds are received.

Sellers value earnest money because it signals commitment and can protect them if a buyer defaults. Buyers benefit because a solid deposit can strengthen an offer, especially in competitive situations.

How much to expect in Panama City and Bay County

The amount varies by price point, property type, and competition. In Panama City and Bay County’s mainstream single-family market, buyers often use about 1% of the purchase price as a rule of thumb. In practical terms for many entry and mid-price homes, deposits of $1,000 to $5,000 are common.

On 30A and in higher-priced coastal segments, deposits are typically higher. Buyers often put down 2% to 5% of the purchase price, and for very expensive homes some buyers use larger flat deposits such as $10,000 to $50,000 or more. Seasonal demand and multiple-offer situations can push deposits higher or shorten contingency timelines.

For very low-price transactions, sellers still usually expect a deposit of at least a few thousand dollars rather than a very small percentage.

Simple examples by price point

• $350,000 Panama City home: 1% is $3,500, which fits many local expectations.
• $600,000 coastal home near 30A: 2% to 5% would be $12,000 to $30,000, depending on competition and terms.
• $250,000 Bay County townhome: a fixed $2,000 to $5,000 deposit may be negotiated, depending on the offer’s strength.

When your deposit is due and how to deliver it

Most Florida contracts require buyers to deliver earnest money to the agreed escrow holder within a short window after both parties sign. Common practice is 24 to 72 hours or within three business days, depending on the contract form and what the listing specifies. Sellers expect prompt delivery, and delays can put your contract at risk.

You will typically deliver funds by cashier’s check, wire transfer, or electronic funds transfer. Some escrow holders accept personal checks, but certified funds are preferred. Always get written confirmation or a receipt from the escrow holder.

Protect yourself when wiring funds. Verify wiring instructions by calling the title company using a trusted phone number, not a number from an email. Wire fraud is a known risk in real estate. Confirm details by phone before sending any money.

What happens to your deposit from contract to closing

Your deposit stays in escrow while you work through contingencies and loan approval. Here is the usual flow:

1. Contract signed and deposit delivered. The escrow holder receipts your funds and holds them in a segregated, insured trust account.
2. Inspection period. You complete inspections. If you find issues and properly notify the seller within the inspection deadline, you can usually cancel and receive a refund based on the contract terms.
3. Financing period. If your contract includes a financing contingency, your deposit remains in escrow while your lender processes the loan. If you cannot obtain financing and give notice within the deadline per the contract, your deposit is commonly refundable.
4. Appraisal and title. Many contracts include appraisal and title-related protections. If a contingency is not satisfied and you follow the contract’s notice rules and timelines, you may cancel and receive a refund.
5. Closing. If everything clears, your earnest money is applied at closing toward your purchase price or closing costs.

If you cancel under a valid contingency and follow the contract’s notice requirements, escrow holders often return funds promptly after receiving proper termination instructions. If the seller disputes the release, the escrow agent will hold funds until both parties sign a mutual release or a resolution process directs disbursement.

When you can get it back and when you might lose it

Your earnest money is typically refundable if you terminate within the contract’s contingency periods and deliver required notice on time. Common refundable scenarios include inspection termination, inability to obtain financing per the contingency, appraisal or valuation issues per the contract, title issues, or a mutual agreement to cancel.

Your earnest money can be forfeited if you default or fail to close after contingencies expire, or you cancel without a contractual right to do so. Many contracts allow the seller to keep the deposit as liquidated damages in that situation. Always watch your deadlines and follow the notice steps in your contract.

If a dispute arises, escrow agents generally keep the funds until both parties sign a mutual release or a binding decision is made through mediation, arbitration, or court order. Some title companies may file an interpleader to let a court decide. Keep copies of your inspection reports, lender communications, notices, and escrow receipts to support your position.

Coastal Florida factors that matter

Buying near the Gulf brings a few extra considerations that can influence your contingency strategy and timeline.

• Flood risk and insurance. Many coastal properties sit in FEMA flood zones, and most lenders require flood insurance. Confirm availability and premiums early in your financing period because high premiums can affect approval and affordability. If insurance becomes a deal breaker, you may need to use a contingency and terminate on time.
• Hurricane history and “as-is” listings. Use your inspection window to evaluate roof, windows, HVAC, and any storm-related repairs. If the seller has disclosed past damage, verify that repairs were permitted and inspected where required.
• HOA documents and estoppels. Many beach-area properties are in HOAs. Use contract deadlines to request and review HOA documents and assessments so there are no surprises that could affect financing or your decision to proceed.
• Out-of-state purchases. Expect to rely on remote signings, local inspectors, and your title company. Build in time for surveys, HOA documents, and permitting checks. Keep communication tight to avoid missing deadlines.
• Seasonality and competition. Beach markets like 30A can be more competitive in peak seasons, which can increase deposits or tighten contingency windows. Structure your offer accordingly.

Smart tips to protect your earnest money

• Confirm the delivery deadline in your signed contract and calendar all contingency dates.
• Send funds only to the named escrow holder and obtain a receipt.
• Call the title company to verify wiring instructions before sending any money.
• Keep copies of your check, wire confirmation, and all notices.
• Align your inspection, financing, appraisal, title, and HOA document timelines so you can make decisions within the windows.
• If you are unsure about insurance costs, obtain quotes early during your financing contingency.
• Communicate quickly if you plan to terminate under a contingency. Written, timely notice is key to refunds.

Local guidance that puts you first

Your deposit should help you win the home, not keep you up at night. With clear timelines, the right contingencies, and a trusted local team, you can protect your funds and move forward with confidence in Panama City, Bay County, and nearby 30A communities. If you want tailored advice on how much to offer and how to structure a clean, competitive contract, reach out for local guidance.

Have questions or need a game plan for your next offer? Connect with shannon cartrett for a friendly, high-touch approach and experienced buyer representation along the Gulf Coast.

FAQs

How much earnest money do I need for a $400,000 Panama City home?

• Many buyers use about 1 percent as a guide, so roughly $4,000, though some offers use a flat amount in the $1,000 to $5,000 range depending on terms and competition.

Who holds my deposit and when is it due in Bay County?

• A neutral escrow holder such as a title company or closing agent holds it, and delivery is commonly required within 24 to 72 hours or a few business days after contract signing.

Can I get my deposit back if inspections reveal issues?

• Yes if your contract includes an inspection contingency and you give proper written notice within the deadline stated in your contract.

What happens to my deposit if financing falls through?

• If your contract has a financing contingency and you timely notify the seller that you cannot obtain the loan under the terms, the deposit is usually refundable.

Are earnest money amounts higher on 30A than in Panama City?

• Often yes, with 30A and luxury coastal segments commonly seeing 2 to 5 percent deposits, while many Panama City and Bay County primary-residence deals land near 1 percent or a modest fixed amount.

How do I avoid wire fraud when sending earnest money?

• Always call the title company using a known, trusted phone number to confirm wiring instructions and never rely solely on emailed instructions without verification.