What Florida Buyers Should Know About Escrow Accounts

When buying a home in Florida, escrow is a critical—but often misunderstood—part of the process.

Here’s how it works.

What Is Escrow?

Escrow is a neutral third-party account that holds funds during a real estate transaction.

In Florida, it typically:

• Holds your initial deposit (also called “earnest money”)
• Protects both buyer and seller if the deal falls apart
• Is managed by a title company, broker, or attorney

When Is Escrow Opened?

Right after your offer is accepted, the buyer usually:

• Submits a deposit (often 1–3% of the purchase price)
• Chooses a title company or escrow agent to hold the funds
• Follows the timeline outlined in the contract

Your agent will include instructions in the offer.

Who Manages Escrow in Florida?

It can be:

• A title company (most common)
• A real estate brokerage escrow account
• A real estate attorney (less common)

Always verify the name and licensing of the party holding your funds.

How Are Escrow Funds Protected?

Escrow accounts are heavily regulated under Florida law:

• Funds must be held in a separate trust account
• No one can access the funds without proper authorization
• If there’s a dispute, the money stays put until it’s resolved

When Do Escrow Funds Get Released?

Your deposit is usually:

• Credited toward closing costs or down payment
• Returned if you cancel within your contingency period
• Forfeited if you breach the contract without cause

Read your contract closely—and never skip the contingencies.

Escrow After Closing

Lenders may also use a mortgage escrow account to:

• Hold property taxes
• Collect homeowners insurance premiums
• Pay bills on your behalf over time

This is separate from your initial deposit escrow.

Final Thought

Escrow protects your money and your deal—but only if it’s handled right.

📞 Call Michael Renick at 941.400.8735 for escrow guidance and Florida buyer representation that puts your interests first.

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