Being a real estate broker and having the responsibility of overseeing my office and our real estate agents, keeping the agents/associate brokers informed regarding handling of trust funds is very important.
What are trust funds you ask? Trust funds are considered anything of value given as a deposit upon executing an offer for a home (or land). Special rules apply to real estate brokerages accepting these deposits on behalf of their clients.
When anyone at The Homefinding Center accepts a check deposit (earnest money), the first order of business is to log it in the "Deposit Log". This consists of logging the information of the client, the check number, the check amount, date of receipt, and where the check will be held until forwarded to escrow or returned to the client. (special note: our office never accepts a deposit made out to our brokerage as we don't maintain a special trust account for those funds)
Rather than having to deal with the deposit log, most of our agents prefer not to handle trust funds at all. How do you do this?
We'll either accept a copy of the deposit check (in this way we're not handling a cashable financial instrument), and insert the clause that the earnest money deposit will be submitted directly to escrow from the buyer upon seller acceptance of the Residential Purchase Agreement.
I think the days of actually collecting trust funds made out to the real estate brokerage and then depositing them in a specially set up trust account are behind most companies. We prefer not to handle the funds, thereby avoiding the strict rules for reporting the chain of possession.
See you at the top... or from the top,
Corona Real Estate Agent Team
The Homefinding Center
951-212-7479
P.S. If you or anyone you know needs help with a loan modification or short sale, my team will be happy to help.
topic: Trust Fund Handling... brought to you by your area Corona Real Estate Agents
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