I learn something new, in this business, everyday!
Alan May writes a great post about escrow. I do caution you as each state has different laws, so look into the laws of your state. In Virginia the law is pretty clear. If the check is not deposited by the due date the buyer is in default. This doesn't allow you to universally cancel the contract but it does mean the buyers agent needs to advice the sellers agent in the delay.
Alan May is a licensed Realtor in the State of Illinois. He writes regularly on Active Rain, where is is well respecged for his quality writing and insights. He is also a Active ran Ambassador.
I had an interesting conversation with a "newish" agent this morning.
We were discussing earnest money, and he was under the (in my opinion, mistaken) impression that if the earnest money check was due today (Jan. 6th) that it was allowed for him to tell me that the check was in the mail.
I told him that 'in the mail' was not what the contract called for. He disagreed and told me that the envelope just needed to be 'postmarked' today.
Again, I disabused him of that notion. It does not say in our contract "and the balance of earnest money will be postmarked 1/6/16"... Our contract says that the "balance of earnest money shall be tendered by 1/6/16.
Just for clarification... he was representing buyers who were out of town, and felt that having them put the e.m. in the mail postmarked today would meet the 1/6/16 requirement. The check would clearly not arrive by 1/16.
While I am correct, that the balance of earnest money is due "in hand" on the date noted... (and not merely postmarked)... But here comes the "I learn something new every day" part. In confirming with my legal counselors... if the check does not arrive on the agreed-upon date... it represents default (or a breach), in the contract.... BUT... you need to give the buyer a chance to remedy the situation.
That remedy is often the buyer's agent phoning the listing agent and telling them "the check has been put in snail mail... I'm sorry we didn't get it to you today...but it's on it's way"... and maybe sending an iphone photo of the actual check...
My legal counselors tell me that you might have some difficulty canceling the contract simply due to a slight delay in the delivery of that earnest money check... even though it is technically a default.
I love this business.
ALAN MAY, Realtor®
Specializing in Evanston Real Estate and North Shore Real Estate
Coldwell Banker Residential Real Estate, 2929 Central Street, Evanston, IL 60201
847.425.3779 Cell: 847.924.3313 Email: Almay@aol.com
Evanston Real Estate & North Shore Real Estate • Licensed in Illinois
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