Realtors, please STOP allowing this

Great reminder. Unfortunately, I learned this the hard way several years ago. Learning it from the blog would have been much easier.

Betty

Yes, it would be good for agents and lenders to have a better understanding of the "other guy's" job. As for the earnest money check - I haven't been an agent for several years now, but when I was, I don't recall this ever coming up. Perhaps it's a new thing? 

I am with you.  I purposely do not over-learn the mortgage side of things.  That is not my chosen specialty.  Whenever a client of mine asks me for mogtgage advise, I always refer him to one or two mortgage professionals with whom I work so he can get the real answer to his question.  I would rather you get the right advice the first time rather than to unlearn bad advice and then learn the correct way.

The hip glue is a good idea for lots and lots of professions, even unrelated ones.  Is that true for all financing, even 30%+ cash down conventional loans?  Or just FHA/VA?  A purchase contract can be valid and binding with a 3rd parties' deposit. 

Joseph,

You have great points.

How about a scenario where the earnest money is in the form of a money order, or cashier's check. Does it matter?

Makes complete sense.  The cross training and the earnest money deposit

Joseph, I have been lucky to work with loan officers who communicate with Realtors and educate their Realtors and clients.  Good post and good ideas.

The thing I am impressed with is the number of people who have commented here. 

The thing I am unimpressed with is some of the self righteous and/or smug comments I have read here by more than just one or two.

Whether the issue originally referred to in the blog is accurate or not...nor whether you agree or not....the callous and rude comments of some of the responders is appalling and disappointing.

And definitely not becoming of a Professional in a Public Forum.

In 8 years and hundreds of transactions, I guess I've never run into this!  Huh!  We put EM in our CTA, and it goes to escrow just before closing, so I'm not even sure a lender is aware of who wrote the EM check...

Hmm, really... And how does the Lender knows who the Escrow check came from?

And as Lloyd said (#155), for the contract to be valid, any check would be fine.

Thank you, Joe.  Twenty-five years in mortgage finance taught me several things; but one thing I learned early in that career is the REALTOR® and Loan Officer have a common interest in the transaction.  Have you ever seen the cartoon of two donkeys tied together and standing between two stacks of hay.  As long as they pulled in opposite directions, neither reached their goal; but with co-operation they both enjoyed a good meal.

Now a REALTOR®, I encourage the loan officer to work with me, and I strive to provide full documentation immediately.  I stress to the buyer(s) the importance of providing all requested information immediately.

Neither REALTOR® nor Lender has all the answers, nor can they always anticipate every "curve ball" coming their way.

One of my favorite agents always told her clients, "don't worry about it, Fred will take care of that."  Point being, she had confidence in me, and I had confidence in her.  Time spent finding fault, placing blame, procrastinating, complaining, and not paying attention goes against the words we rehearse to every client: "time is of the essence."

REALTORS® and Loan Officers have a common fault--no one is perfect.  Let's not squander the opportunity to work together and correct a problem, help our mutual client, and get the deal done!!!

I have never felt tension between myself and the lenders I work with.  We have different jobs and your helping your agents to understand your process is part of that job.  There is great turnover in our industry on both sides. I find the people with years of experience have usually learned that it is a back and forth process with many things poppling up.  I work with the lenders who can move through them quickly and efficiently with mutual respect and ongoing communications at the heart of the relationship. 

A great reminder to do it right from the beginning because that saves time later.

Our standard contracts now include language that the buyer will be responsible for depositing the EM with escrow within three business days of acceptance.  I no longer worry about the check part but I'm going to need to remember to tell the buyer to make sure that the money does come from an account which has their name on it!

I completely agree with you and think that everyone should try to  understand  the other sides of the business, and posts like this help to keep everyone on the same page. The things we take for granted,you would think everyone knows this! 

Thanks Joe for the reminder.

It's not a problem when the spouse signs an earnest money check on a joint account, is it?

I love the cross training idea as well. I have been recently cc'd by one of my buyers on communications between her and a lender and am impressed with his expertise and service. When mortgage originator licensing became required, I was relieved to forget some of my mortgage facts and hand off all loan questions to my favorite LO's. But of course earnsest money and some contract language are common interests to us both.

Similarly, I would like to ask LO's to please not advise our clients/ customers about how they should be able to negotiate or get a certain type of deal for a property. I've overheard it many times especially when an appraisal comes in low. There is never a guarentee that a party to a contract will adjust their position.

This should be a no brainer. But I guess it's not.

I feel your passion and totally agree about sleeping with one another for a week or so.

This is a good point and I appreciate the reminder.