Nicole McGowanREALTOR®, MRP, SRS
Real Estate Terms, Explained

What Is Earnest Money?

And Is It Refundable? What Buyers Around Fort Walton Beach Should Know

By Nicole McGowan, REALTOR® · Published October 21, 2026

Fort Walton Beach
  • Navarre
  • Crestview
  • Niceville
  • Shalimar
  • Mary Esther
  • Destin
  • Freeport

Your offer just got accepted. Then comes the question: "When can you send the earnest money?" Earnest money, or EMD for short (earnest money deposit), is often the first real money you put down on a house. So it's normal to wonder where it goes, how much it should be, and whether you get it back if things fall apart.

What it isIs it refundable?Where it goes
The Short Answer

A Good-Faith Deposit

Earnest money, often called EMD, is the deposit you put down after your offer is accepted, to show the seller you're serious. It's held by a neutral escrow agent, and if you close, it counts toward your purchase. Open the cards below for the details.

The Short Answer, ExplainedWhat earnest money really is
Shows you're serious
It tells the seller you plan to follow through, so they can stop showing the home to other buyers.
Held by the title company
Around here, the escrow company is usually the title company, a neutral party that holds it in escrow. It never goes straight to the seller.
Not extra money
When you close, it's usually credited toward your down payment or closing costs.
EMD or escrow deposit
Agents often shorten it to EMD. In Florida purchase contracts, you'll see it listed as the escrow deposit.
How Much Earnest Money?There's no single number
About 1% is a common start
Around here, about 1% of the price is a common starting point. Nationally, 1% to 3% is typical. On a $300,000 home, 1% is $3,000.
It depends on you
There's no one right number. The amount is part of your offer and depends on your situation and what you have set aside.
Less due at closing
Because your EMD is credited at closing, the more you put down now, the less you'll bring on closing day.
Sometimes in two parts
Florida contracts can split it into an initial deposit and an additional deposit due later.
What Sellers Notice About Your EMDIt's one piece of the whole offer
Rarely the deciding factor
Around here, price, terms and closing date usually matter more to a seller than the size of the deposit.
It matters more with competition
If a seller has more than one offer, a higher EMD can be one more thing they weigh.
A sign you're committed
In some situations, a deposit helps show how likely a buyer is to see the deal through.
It fits the whole picture
A smaller EMD with a request for closing cost help makes sense together. A larger EMD with a request for every closing cost may leave a seller wondering how much help is needed.
Agent Tip From Nicole

Always remember the name of your title company, whether you're buying or selling. Years from now, when you go to sell or need your paperwork, you can often request those documents right from them.

Tap Each Stage

Follow Your EMD to the Finish Line

Your Offer Is Accepted

You and the seller both sign. The contract spells out how much your EMD is and the date it's due.

Closer to the finish line
Your EMDStill with you

You Send the EMD

By the date you agreed to, often 1 to 5 days after going under contract, you send it by check or wire to the title company.

Closer to the finish line
Your EMDOn its wayTipCall before you wire

It's Held in Escrow

Your deposit sits in the title company's escrow account, not in the seller's pocket, while the rest of the deal moves along.

Closer to the finish line
Your EMDSafely held

Your Deadlines Run

Inspection, financing and appraisal periods tick by. Keeping track of every one of them, and reminding you, is your agent's job.

Closer to the finish line
Your EMDMost protected now

Credited at Closing

On closing day, your EMD is applied toward what you owe, so it's money you were already going to spend.

Closer to the finish line
Your EMDCounted toward your costs
Agent Tip From Nicole

You have more say in a purchase contract than you might think, and that includes when your EMD is due. If payday is five days away, tell your agent before you write the offer so the contract gives you that time. Buyers around Fort Walton Beach, Navarre and Crestview usually send it 1 to 5 days after going under contract, and always before the inspection period ends. Once everyone signs off and the title company knows the date, they'll be expecting your deposit then.

Spotlight

Is Earnest Money Refundable?

Often, yes, when you cancel for a reason your contract allows, and you do it on time.

You usually get it back when

  • You cancel within your inspection period
  • Your loan isn't approved in time, after a good-faith effort
  • The home appraises low and your contract covers it
  • There's a title problem the seller can't fix
  • You cancel within a condo or HOA document review period
  • The seller backs out or can't close

You could lose it when

  • You miss a contract deadline
  • You back out after your contingency periods end
  • You change your mind for a reason the contract doesn't cover
  • You waived a contingency you later wish you had
  • You simply don't close
If Both Sides Want It

The escrow agent doesn't pick a winner. The money stays put until buyer and seller both sign a release, or a court decides.

More Questions Buyers Ask
Earnest Money vs. Down PaymentRelated, but not the same
Two different things
Your down payment is worked out between you and your lender as part of your loan. Your earnest money is a number you choose yourself to include with your offer.
One counts toward the other
At closing, your earnest money is usually applied to your down payment or closing costs.
Different timing
Earnest money comes right after your offer is accepted. The rest of your money comes at closing.
No down payment?
Even with a loan that needs no down payment, a seller will usually still expect an EMD, and it goes toward your closing costs.
Sending It SafelyProtect your money from scams
Check or wire
Most deposits go by check or wire to the escrow agent named in your contract.
Call before you wire
Confirm wiring instructions by phone, using a number you already know, never one from an email.
Get a receipt
Ask the escrow agent to confirm in writing that your deposit arrived.
Never to the seller
Your deposit goes to escrow, not straight to the seller.
Buying With a VA Loan?What military buyers should know
No down payment, still an EMD
A VA loan doesn't require a down payment, and the VA doesn't require earnest money either. But your EMD is different: it's credited toward your closing costs.
Often $700 to $1,500 here
Around Fort Walton Beach, VA buyers often offer about $700 to $1,500 on homes under $350,000. Local sellers tend to understand.
Sellers still expect one
Even a modest deposit shows the seller you're serious about their home.
Low appraisal protection
A VA loan comes with a clause that lets you walk away with your deposit if the home appraises below the price.

Sources: PNC and Florida Realtors. Every contract is different, so your own contract's terms and deadlines are what count.

The Takeaway

Serious Money, Safely Held

Earnest money shows a seller you mean it, and it's held safely in escrow while you do your homework on the house. Your own agent's job is to know every deadline in your contract and keep you reminded of each one, so your deposit stays protected. It's one of the biggest reasons to have an agent on your side.

Insider Tip

Missing a date is one of the easiest ways to put a deposit at risk. That's why tracking your inspection, financing, appraisal and closing deadlines, and reminding you before each one, is part of your agent's job, not something you should have to carry alone.

Getting ready to make an offer? Text me.We'll talk through the right deposit for your offer, and I'll keep track of every deadline that protects it.
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Nicole McGowan REALTOR®, MRP, SRS
CENTURY 21 Wimco Realty, Inc. 130 Mary Esther Blvd, Mary Esther, FL 32569 Serving the greater Fort Walton Beach area
850-855-6899
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