The buyer’s earnest money deposit, a.k.a. escrow deposit, is held by a title agency, real estate office or an attorney. The escrow funds are deposited into a bank account regulated by the State of Florida. Standard Florida real estate contracts require that the contact information for the “Escrow Agent” be entered on the agreement.
Verification of Deposit
Once the deposit is made, the The Escrow Officer prepares a Verification of Deposit Letter. The written verification assures all parties that the funds have cleared and are being held according to the purchase agreement.
Some real estate contracts call for additional funds to be placed into escrow within a certain number of days, such as when the inspection contingency or financing contingency is removed.
Deposit Credited to Buyer
The escrow deposit on your home will be disbursed in accordance with terms and conditions of the contract. At closing, the earnest money funds are usually credited back to the buyer.
Return on Escrow
Most Tampa Bay real estate contracts are contingent upon inspections and financing. If there is a problem with the inspection or financing, then the earnest money deposit may be returned to the buyer according to provisions in the contract. In the event the contract is canceled, all parties must sign a “Cancellation of Contract & Release Of Escrow Deposit” addendum.
Obligation To Close
After the contingencies are removed, however, the buyer is obligated to close on the home. In the event of a breach of contract by the buyer, the contract allows the seller to recover not only the initial deposit but also any unpaid deposit.
The Florida Residential Contract For Sale And Purchase includes dispute resolution procedures. When conflicting demands for the deposit are received, the escrow agent holds the deposit until the parties agreement, until a final judgment of a court, or until a ruling by the Florida Real Estate Commission (FREC).
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