Does my Check get Cashed for the Earnest Money?

By
Real Estate Broker/Owner with Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 DRE# ER40011786

 

 

Earnest Money Check 

 If my earnest money is to be used for the final amount at closing, why do they cash my check?    This is a common question, but your earnest money is a promise to pay and good faith to continue with this transaction.     If you had nothing on the table to lose, buyers may walk away from a transaction quicker.      If a transaction is to close in a short period of time, good funds will be needed, rather than waiting for a personal check to clear the bank.    

 

I always remind my buyers the check WILL BE CASHED, and to be sure the funds are available in the account before delivering the earnest money check.     If this check bounces, it is a sure sign the transaction will not go to closing!

 

This good faith money will be reduced from the total amount you will need at closing.      Typically it is held at the Title Company on behalf of the buyer.     If there are bumps in the road, and the buyer opts to terminate, two forms - Notice to Terminate and Earnest Money Release will need to be signed by both buyer and seller for the earnest money to be returned to buyer.

 

As a Denver REALTOR® I can guide you through the Denver home buying process with ease.    Give me a call and we can get started with the Denver home purchase!

 

 

Posted by

 

 

 

  - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

 

Metro Brokers - House to Home, Inc.House to Home

GRI, CRS, CNE, e-Pro  

Broker/Owner

Joan@JoanCox.com

720-231-6373

 

Denver Real Estate

Homes for Sale in Denver

Neighborhoods in Denver

 
  A Denver Metropolitan Realtor

FacebookTwittergoogle +  Linkedin

 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Real Estate General Information
Location:
Colorado
Groups:
Buyer Information - What Buyers Need to Know in Today's Market
Advice for Buyers
Tags:
earnest money check
what happens with the earnest money check

Spam prevention
Show All Comments
Rainmaker
3,481,654
Joan Cox
Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

William, have never had that question --- hold until they get paid.  WOW, definitely not strong buyers.

Jan 31, 2018 08:16 AM #13
Rainmaker
3,481,654
Joan Cox
Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Debbie Reynolds how do buyers get away with NO earnest money?   Our days of promissory notes are long gone, have not seen one in years.

Jan 31, 2018 08:17 AM #14
Rainmaker
3,481,654
Joan Cox
Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Debb, on one of my listings last week, received an offer with more EM than requested, and made them look stronger.

Jan 31, 2018 08:17 AM #15
Rainmaker
3,481,654
Joan Cox
Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

John, you are right, and also have to explain to the Seller, it isn't THEIR money unless the buyer defaults.

Jan 31, 2018 08:18 AM #16
Rainmaker
2,346,851
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Hi Joan... I get that question from time to time and have wondered why people think we ask them to write a good faith check and that it won't be desposited.

Jan 31, 2018 09:14 AM #17
Rainmaker
1,379,304
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
your real estate writer

If that check wasn't cashed, it would be no better than an IOU.

Jan 31, 2018 09:56 AM #18
Rainmaker
1,449,655
Gary L. Waters, Broker Owner, Waters Realty of Brevard, LLC
Waters Realty of Brevard, LLC - Rockledge, FL
... a small office, delivering big service!

I have had a few first time buyers experience the confusion of earnest money and the closing prices.  Good explanation!

Jan 31, 2018 10:39 AM #19
Ambassador
1,902,602
Silvia Dukes PA, Broker Associate, CRS, CIPS, SRES
Tropic Shores Realty - Ich spreche Deutsch! - Spring Hill, FL
Florida Waterfront and Country Club Living

Joan, when the earnest money check bounces, lots of red flags go up !

Jan 31, 2018 04:39 PM #20
Rainmaker
3,954,205
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

I hope home buyers will read this post and learn. Thank you for sharing.

Feb 01, 2018 03:38 AM #21
Rainmaker
4,197,490
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Excellent information and advice, Joan.  Those making earnest money deposits need to ensure the funds are available.

Feb 01, 2018 05:19 AM #22
Rainmaker
849,103
Sheri Sperry - MCNE®
Coldwell Banker Residential Brokerage - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

HI Joan Cox - In my area, escrow does not start until the earnest money check is handed in. 

Feb 01, 2018 05:37 AM #23
Rainmaker
3,481,654
Joan Cox
Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Nina, it does make sense that a good faith check would be deposited, but some buyers miss that point.

Feb 01, 2018 09:05 AM #24
Rainmaker
3,481,654
Joan Cox
Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Marte, we used to see those too - promissory notes, but no longer.

Feb 01, 2018 09:06 AM #25
Rainmaker
3,481,654
Joan Cox
Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Gary  first time buyers do need lots of guidance and why certain things are done they way they are!  

Feb 01, 2018 09:06 AM #26
Rainmaker
3,481,654
Joan Cox
Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Silvia Dukes PA, Broker Associate, CRS, CIPS, SRES have had a handful that did bounce, and funny, the transaction never closed.  Always a red flag! 

Feb 01, 2018 09:07 AM #27
Rainmaker
3,481,654
Joan Cox
Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Gita, thank you and hope buyers learned something with my post.

Feb 01, 2018 09:08 AM #28
Rainmaker
3,481,654
Joan Cox
Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Gabe, I agree, and if they don't, and the check bounces, everyone gets very nervous!  

Feb 01, 2018 09:08 AM #29
Rainmaker
3,481,654
Joan Cox
Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Sheri, that is a good point.  We can start here once we have an executed contract.

Feb 01, 2018 09:10 AM #30
Rainmaker
1,396,555
Yolanda Cordova-Gilbert
Sitterle Homes - Richmond, TX
Sitterle Homes

Joan,

Good blog and right on point for earnest money.  We had some try to threaten us over keeping their earnest money they held on to a finished home and then changed their mind.

Feb 01, 2018 01:58 PM #31
Rainmaker
3,481,654
Joan Cox
Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Yolanda, well your builder contract protects the builder when that crap happens!  

Feb 02, 2018 02:44 PM #32
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
3,481,654

Joan Cox

Denver Real Estate - Selling One Home at a Time
How can I help you with your Metro Denver Real Estate needs?
*
*
*
*
Spam prevention