Earnest Money
A good-faith deposit a buyer puts down to show serious intent, held in escrow and applied at closing.
Earnest money is a deposit a buyer provides to show good faith when making an offer. It is held in an escrow or trust account, not by the buyer or seller directly. At closing the deposit is typically credited toward the buyer's costs.
Earnest money is not required for a contract to be valid, but it signals commitment. A Florida broker who receives earnest money must place it in escrow no later than the end of the third business day after receiving it.
On the exam
Exam trap
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Brokerage Activities (12% of the exam)
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Try 5 free questionsRelated terms
- Commingling
Mixing escrow funds with a broker's personal or business funds, which is a Florida license law violation.
- Conversion
Using entrusted escrow funds for the broker's own benefit, a serious Florida license law violation that can carry criminal penalties.
- Statute of Frauds
The rule that contracts for the sale of real property must be in writing and signed to be enforceable.
This definition is Florida real estate exam-prep education, not legal, tax, or professional advice. Verify current rules against the official source before relying on them for a real transaction. Back to the full glossary.