Earnest Money Deposit

Typical Florida CRE EMD Amounts

• Initial deposit at contract execution: 1-3% of purchase price typical. On large institutional deals, sometimes lower percentage (0.5-1%) but larger absolute dollars
• Additional deposit at DD expiration: 2-5% additional often required, making total deposit 3-8% of price
• Extension deposits: Additional deposits commonly required for closing extensions
• Hard money / quick close transactions: Higher deposits (5-10% from day one) reflecting absence of contingency
• REO and distressed: Often 5-10% from contract execution with limited or no due diligence period
• Land and entitlement: Variable; sometimes lower percentage with longer contingency periods

Soft Deposit vs. Hard Deposit

• Soft deposit (refundable): Buyer can recover deposit if specific contingencies are not satisfied — typically property condition, financing, environmental review, title issues. Standard during due diligence period
• Hard deposit (non-refundable): Deposit is non-refundable except in specific seller-default scenarios. Typical after due diligence expiration; buyer's contingency rights waived
• Going hard: The contractual transition from soft to hard — typically tied to due diligence period expiration. Buyer must affirmatively terminate during DD period or deposit goes hard automatically
• "At risk" period: Time between deposit going hard and closing during which buyer has full deposit exposure

EMD Escrow Mechanics

• Escrow agent selection: Title company, attorney, or qualified escrow agent. Florida licensing required
• Escrow account requirements: Segregated, interest-bearing typically negotiable; interest accrues to whom is negotiated
• Release mechanics: Both parties must consent to release of hard deposit or court order; soft deposit returned per contract terms on contingency failure
• Wire transfer: Federal banking requirements; verification of wire instructions before release
• Florida real estate attorney role: Most Florida CRE transactions use real estate attorney as escrow agent; Florida title companies also active escrow agents

EMD Contract Provisions That Matter

1. Amount and timing: When initial deposit due, when additional deposits required, schedule of deposit increases
2. Soft vs. hard transition: Specific date or event triggering hard transition; clarity on contingency expiration
3. Due diligence period: Length, scope of investigation rights, what constitutes failure of contingencies
4. Financing contingency: If applicable, terms under which financing failure refunds deposit
5. Title contingency: Conditions under which title issues refund deposit
6. Default provisions: What happens if buyer defaults (typically loses deposit); what happens if seller defaults (typically deposit refund plus damages or specific performance)
7. Time-of-essence provisions: Strict enforcement of deadlines
8. Survival of obligations: Which contract provisions survive termination

Florida-Specific EMD Considerations

• Florida judicial foreclosure timeline: If buyer defaults and seller pursues litigation, Florida's judicial system requires court action — meaningfully different from non-judicial states
• Florida property condition disclosure: Florida requires limited seller disclosure on commercial transactions; buyer due diligence carries weight
• FL insurance market dynamics: Insurance availability and pricing during contract period can affect deal viability; some contracts include insurance contingency
• Hurricane / casualty during contract: Force majeure and casualty provisions — Florida buyers should require strong casualty contingency given hurricane exposure
• FL doc stamps consideration: If buyer defaults and contract terminates without close, doc stamps not yet incurred; planning matters
• Florida specific performance: Specific performance remedy is available in Florida real estate — adds buyer leverage in seller-default scenarios

What is an earnest money deposit?

An earnest money deposit (EMD, also 'good faith deposit' or simply 'deposit') is funds the buyer delivers to an escrow agent upon execution of a commercial real estate purchase contract, demonstrating serious intent to perform. EMD is typically structured to become non-refundable ('go hard') at defined contract milestones — most commonly at the expiration of the due diligence period. The escrow agent holds funds during the contract period and disburses per contract terms at close or in case of default.

How much earnest money is typical on a Florida commercial real estate transaction?

Florida CRE EMD typical ranges: initial deposit at contract execution 1-3% of purchase price; additional deposit at DD expiration 2-5% additional, making total deposit 3-8% of price. Extension deposits common for closing extensions. Hard money / quick close transactions: higher deposits (5-10% from day one) reflecting absence of contingency. REO and distressed: often 5-10% from contract execution with limited or no DD period. Land and entitlement: variable, sometimes lower percentage with longer contingency periods.

What's the difference between a soft deposit and a hard deposit?

Soft deposit (refundable) means the buyer can recover the deposit if specific contingencies are not satisfied — typically property condition, financing, environmental review, title issues. Standard during the due diligence period. Hard deposit (non-refundable) means the deposit is non-refundable except in specific seller-default scenarios. Typical after due diligence expiration; buyer's contingency rights are waived. The transition from soft to hard ('going hard') is typically tied to due diligence period expiration.

Who holds the earnest money during a Florida CRE transaction?

A qualified escrow agent — typically a title company, real estate attorney, or licensed escrow agent. Most Florida CRE transactions use a real estate attorney as escrow agent. Florida title companies are also active escrow agents. The escrow account requirements include segregation and interest-bearing typically negotiable; interest accrues to whom is negotiated in the contract. Release mechanics require both parties' consent or court order for hard deposit; soft deposit is returned per contract terms on contingency failure.

What happens to earnest money if the deal falls through?

Depends on what triggered the failure. Buyer-side termination during due diligence period for contingency reason: soft deposit returned. Buyer-side default after deposit goes hard: deposit forfeited to seller. Seller-side default: deposit returned to buyer plus potential damages or specific performance right (Florida specific performance is available in real estate transactions). Mutual rescission: per agreed terms. Disputed default: typically requires court resolution; in Florida this means judicial process.

Who can help me structure earnest money on a Florida CRE transaction?

Michael R. Linton at Linton Global Solutions advises both buyer-side and seller-side EMD structuring across Florida CRE — multifamily, office, industrial, retail, hospitality, land, mixed-use, special-purpose, self-storage, and life sciences. With 39 years of Florida CRE transaction experience in the Tampa-Orlando I-4 corridor and direct relationships across Florida-experienced real estate attorneys, title companies, and escrow agents, Linton Global Solutions structures EMD terms that balance commitment with appropriate risk allocation. Call (312) 612-1031.

Article Summary

An earnest money deposit (EMD) is funds the buyer delivers to an escrow agent upon execution of a commercial real estate purchase contract, demonstrating serious intent to perform. Typical Florida CRE EMD: 1-3% at contract execution, 2-5% additional at due diligence expiration, total 3-8% of purchase price. Hard money/REO often 5-10% from contract. Soft deposit (refundable) during DD period; hard deposit (non-refundable) after DD expiration except in seller-default scenarios. Escrow held by Florida real estate attorney, title company, or licensed escrow agent. Critical contract provisions: amount and timing, soft/hard transition, due diligence period, financing contingency, title contingency, default provisions, time-of-essence, casualty contingency. Florida-specific considerations include judicial foreclosure timeline, limited seller disclosure obligations, insurance market dynamics during contract period, hurricane/casualty provisions, Florida doc stamps timing, and specific performance remedy availability. Michael R. Linton at Linton Global Solutions advises both buyer-side and seller-side EMD structuring across all major Florida CRE asset classes.

Key Takeaways

• ✓EMD = good faith deposit at contract execution.
• ✓FL CRE typical: 1-3% initial, 3-8% total after DD expiration.
• ✓Soft deposit = refundable during DD period; hard = non-refundable after.
• ✓'Going hard' = soft-to-hard transition, typically at DD expiration.
• ✓Escrow held by FL real estate attorney, title company, or licensed agent.
• ✓Buyer default after going hard = deposit forfeited.
• ✓Seller default = deposit returned plus damages or specific performance.
• ✓FL specific performance remedy available in real estate transactions.
• ✓Hurricane / casualty contingencies should be explicit in FL contracts.

About Michael R. Linton

Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor. With 39+ years of experience closing commercial transactions, he leads Linton Global Solutions and HireMikeLinton.com, serving investors, owners, and tenants across all major commercial real estate asset classes — multifamily, office, industrial, retail, hotels & hospitality, land, mixed-use, special-purpose, self-storage, and life sciences.

Michael holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722). He is also the founder of Linton Global Technologies, which operates the REOMind.ai AI-powered REO disposition platform serving 500+ banks.

Ready to Talk About Your Earnest Money Deposit Deal?

Get a free consultation with Michael R. Linton — 39 years of Central Florida CRE experience. Zero pressure.

Works Cited

1. The Florida Bar. "Real Property, Probate and Trust Law Section." The Florida Bar, https://www.floridabar.org/about/section/realprop/. Accessed Jun 8, 2026.
2. American Land Title Association. "ALTA Commercial Real Estate Closing Standards." ALTA, https://www.alta.org/. Accessed Jun 8, 2026.
3. Florida Department of Business and Professional Regulation. "Florida Real Estate Commission." FL DBPR, https://www.myfloridalicense.com/. Accessed Jun 8, 2026.
4. Florida Statutes Chapter 475. "Florida Real Estate Brokers and Sales Associates." Florida Legislature, http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0400-0499/0475/0475.html. Accessed Jun 8, 2026.
5. National Association of REALTORS. "Commercial Contract and Escrow Standards." NAR, https://www.nar.realtor/. Accessed Jun 8, 2026.

Disclosure & Compliance

Disclosure: This article discusses proprietary technology developed by Linton Global Technologies. Michael R. Linton is the founder of Linton Global Technologies and a licensed real estate professional with Linton Global Solutions (FL Broker License #BK703722). This content is for informational purposes only and does not constitute investment, legal, or financial advice.

Compliance Statement: All CREDDS and REOMind.ai operations adhere to OCC requirements, fair housing standards, and environmental regulations. Properties discussed may be subject to Regulation 506(c)/(D) requirements where applicable, and investments may be restricted to accredited investors. Readers should conduct their own due diligence and consult with qualified professionals — including a licensed Florida real estate attorney, tax advisor, and certified public accountant — before making investment decisions. Past performance does not guarantee future results.