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Who holds the earnest money?

By
Real Estate Broker/Owner with Trombley Real Estate

OK, in real estate regarding the earnest money, who holds the earnest check until closing. Who has the trust account that will hold this money? I look for the listing agents firm to have a trust account to hold this money!

I have been seeing some this happen where the listing agent is making the responsibility of the buyer's agents firm to hold the earnest money. What is up with that?

The listing agent must not have a trust account, so they cannot hold the earnest money?

Maybe they are being over paid by the listing and do not know what to do with the earnest money?

Why cannot the listing agent take the earnest money and put it in to their trust account and if over paid then they take the earnest money to closing?

Come on take on the responsibility?

OK, What happens if you run into someone who is only a buyers agent that cannot via have a trust account and wants to put an offer in then who's going to keep the earnest money when the buyers only agent connot?

What I am trying to say, being the buyers agent you should not have the earnest money it should go to listing side. I am seeing where the listing agent is saying the buyers side should keep the earnest money.

Comments (12)

Linda Futral
Newnan, GA
As a buyers only agent I turn in the earnest money to my broker as soon as I get it and it goes into our trust account.  I can not believe there are places where agents are holding the earnest money.  I certainly would not want that on my head.
Sep 30, 2007 06:05 AM
J Perrin Cornell
Coldwell Banker Cascade Real Estate - Wenatchee, WA
Broker, ABR, VAMRES
Get rid of the money asap... I always pass it to my broker who rather than open a trust account and deal with the complications passes it on to the escrow agent to hold. State requirements may differ.
Sep 30, 2007 06:12 AM
Judi Glamb
Coldwell Banker Hearthside - Hellertown, PA
Associate Broker, ABR

Here in PA it is the listing firm that holds the escrow in the trust account unless specified otherwise.  The next avenue is usually a real estate attorney.  In rare cases, I've seen the buyer's firm.

I don't know what the deal is with the listing firm not holding escrow - are they under investigation, maybe a pending litigation? 

 

Sep 30, 2007 06:15 AM
Adam Brett
The Adam and Eric Group - Fullerton, CA
The Adam and Eric Group, Fullerton's Finest
It should state in the Purchase Contract what happens to the deposit.  In California it is to be deposited into escow within 3 days of offer acceptance.
Sep 30, 2007 06:20 AM
Jennifer Esposito
JenRan Realty, LLC - Woodstock, CT
In my state it is customary for the listing agent to get the deposit and deliver to their broker to be put into an escrow account. 
Sep 30, 2007 06:34 AM
Herb Hamilton
RE/MAX Preferred Inc. Realtors - Portland, OR
Real Estate Broker ,CDPE, Downtown Portland

Each State is Different in terms of earnest money deposits. In Oregon the Real Estate Agency requires all Brokerages to have and maintain a Clients Trust Account.

However. Most firms do not use that Trust Account ( at least the bright ones don't). Instead most of us collect the funds from the Buyer who makes the EM Check out to the Title and Escrow Company, which we in turn give to our office for accounting purposes. The office then forwards the check to Title and Escrow.

In the future if their is any dispute over the EM. The disposition of funds then becomes the Title and Escrow's problem not the Broker. This prevents problems like a Broker returning funds to their client which they may be sympathetic towards, while ignoring the other parties needs and or claims.

Sep 30, 2007 06:38 AM
Susan Trombley
Trombley Real Estate - Wake Forest, NC
Broker/Realtor, Raleigh, Cary, Wake Forest, Youngs
What I am trying to say, being the buyers agent you should not have the earnest money it should go to listing side. I am seeing where the listing agent is saying the buyers side should keep the earnest money.
Sep 30, 2007 06:57 AM
Cynthia Tilghman, RealtorĀ® Onslow County NC Home Specialist
Kingsbridge Realty, Inc - Hubert, NC
Hi Susan,
Not in my transaction.  Listing agent will have the EMD deposited in their trust account.  That's just the way it's done here.
Sep 30, 2007 07:35 AM
Susan Trombley
Trombley Real Estate - Wake Forest, NC
Broker/Realtor, Raleigh, Cary, Wake Forest, Youngs
Cynthia - Thank you and i agree that is the way it should be done. I am tired of looking in the agent notes to see the extra instructions that are out of the normal way things are to be done.
Sep 30, 2007 07:49 AM
Sharon "Toni" Brown
Exit Realty United - South Ozone Park, NY
South Ozone Park - New York City Real Estate
I say refer to the state law and not try to waiver from it.  I don't understand people who want to make their own rules and subjugate the law in doing it.  This is an issue that should be handled between the broker's and not come from the listing or buying agent.  I would release resposibility of the EMD to the proper party and not be in the middle of any possible dispute over it's disposition.
Sep 30, 2007 01:44 PM
Susan Trombley
Trombley Real Estate - Wake Forest, NC
Broker/Realtor, Raleigh, Cary, Wake Forest, Youngs
Toni - I agree, why do others try and rewrite the book. Just do as the others and if you have issues then put it on the adgenda and see if everyone will make the changes.
Oct 01, 2007 04:54 AM
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

Earnest Money is defined as the $1,000 that the Buyer loses when in contract on one of our listings and they try to pull some "funny stuff"!

Aug 08, 2010 03:16 AM