Include a Copy of The Earnest Money Deposit with Offer - WHY?!

Real Estate Agent with L.A. Property Solutions BE# 01342428

faxed checks are useless There are still a lot of listings in the MLS with the instructions to include a copy of the earnest deposit check with an offer.  Any offers not including ALL required documents will not be considered.  Exactly what is the point of this?  I don’t know about you, but I’ve never heard of anyone being able to cash a COPY of a check.  Sure, in the “old” days when we actually delivered the offer to the listing agent we would include an honest to goodness check with the package. 

Now that we are using electronic signatures and emails (does anyone really USE a fax machine anymore?), what is the point of having our clients write useless checks to ‘escrow’?  I have had my share of arguments with listing agents, mostly REO agents who tell me “the bank requires it”.  Seriously, does any bank actually think they can deposit a copy of a check? I have a client who will write a check from his office, take a photo of it with his phone and text it over to me.  That’s right!  I am now sending photographs of checks with offer packages.  Does anyone else think this is as ridiculous as I do?

One of my colleagues is working with an investor who offers on property after property after property – many of them bank owned.  He has finally gotten to the point that he has taken a single check from his checkbook and made multiple copies of the blank check. Now he simply fills in a copy to fit whatever property he is offering on and gives that to his agent to submit with the package.  He may not be saving a tree but he is certainly saving himself money by not having to reorder checks as often!  It’s not just about investors either. In the current Los Angeles real estate market just about everything is selling in multiple offers.  A buyer will likely submit many offers before actually getting one accepted. Just how many useless checks are people expected to write and tear up?

 you can't cash a photocopy of a check

For several years, most Los Angeles agents have been filling writing something to the effect of “buyer to wire earnest deposit  to escrow” into the purchase contract to avoid having to deal with multiple checks from clients, logging checks and dealing with trust fund accounts.  The California Association of Realtors finally modified the purchase contract to include the option of ‘buyer shall deliver deposit directly to escrow holder”. So great, now we can simply check the box that the buyer will deliver the deposit after acceptance and be done with it.  But no! Even though this is now printed right in the contract, we are still being instructed to submit a copy of the EMD with the purchase offer.  I am hopeful that someday soon sellers who make this demand will realize that a fax, PDF or photograph of a check is not worth the paper it is written on.  

Jenny Durling - Los Angeles, Realtor



Jenny Durling
L.A. Property Solutions


Copyright © 2012 By Jenny Durling * Include a Copy of Earnest Money Deposit With Offer – WHY?!





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Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

Personally, I don't care one way or the other.  It's better then those Promissory Notes we used to use and them "redeem."  I like #54 response of it being proof that a check was drafted payable to escrow in the said amount.  I also like to get the check upfront when I write up the offer.  Once the EM check is drafted and handed to me I don't have to follow-up getting it from the client when their offer is received.  Write it out now, let me put it in the transaction file, I'll send a photocopy of it with the offer and when the offer is accepted, I'll call for a escrow pick-up. 

Jul 21, 2012 09:05 AM #99
Jenny Durling
L.A. Property Solutions - Los Angeles, CA
For Los Angeles real estate help 213-215-4758

Carla - I used to find out what escrow company it was going to be and have the buyer write a check to escrow. Those checks would have to be logged into the trust register, which was fine. The main problem with REO's is that they don't tell you who the check is supposed to be written to anyway so buyer's just write "escrow".  I really don't want them written to my brokerage and have to put them into a trust account, knowing full well that my client will wire funds to escrow after acceptance IF the offer is accepted. Does OR not have rules that once you take a check from your client you have to deposit into a trust account within a certain number of days?  In a normal market where you are not competing with a zillion other buyers for the same few available properties it might make sense to have the buyer write a check and hand it to me. In the current L.A. market it just turns into a lot of busy work since the ratio of offers written to offers accepted is sooooo high. (apparently this is not an issue for Leslie #48 - as ALL of her offers get accepted) Me thinks our markets are a weeeee bit different!

Jul 21, 2012 09:16 AM #100
Kevin P. Cummins
Coldwell Banker Residential Brokerage - San Diego, CA

First, the seller gets to decide the parameters of the offer so with REOs and short sales, fine, provide a copy as pointless as that is. Maybe this great post and all of the helpful comments will help educate Old School listing agents on the revised RPA in CA, and why this practice is obsolete.

Second, and this is my own pet peeve on this topic, in the CA RPA, it is a defined term called the "Initial Deposit", not the Earnest Money Deposit. In my opinion, the term EMD should not be used by CA REALTORS because it is a loose, generic term with no referenc under the RPA, yet I hear it everyday. I know other states use EMD, but when talking about the funds a buyer is required to deliver within 3 days of Acceptance, we should all start using the defined term "Initial Deposit".

Jenny, I agree with you and many others here that providing proof of funds (a/k/a "Verification of Down Payment and Closing Costs" in the RPA) is much more powerful and meaningful, which every buyer should provide with every offer, even though the RPA allows for deliver in 7 days. That said, if the buyer's agent checks the box on page 1 stating that buyer will deliver a check to escrow, then it makes some sense to write that check out and deliver a photo copy. What makes no sense is forcing a buyer to deliver a check copy when they indicate that they will wire their Initial Deposit.

Jul 21, 2012 09:30 AM #101
Jenny Durling
L.A. Property Solutions - Los Angeles, CA
For Los Angeles real estate help 213-215-4758

Kevin - good point about the contract wording "initial deposit".  I think we are stuck with atiquated 'send a copy of EMD" for some time to come though. I guess it's no surprise that banks want copies of checks. They are so living in the past that they also dont' accept electronic signatures.

Jul 21, 2012 10:09 AM #102
Yolanda Hoversten
Berkshire Hathaway HomeServices Elite Properties - O'Fallon, IL
Broker - O Fallon, IL Real Estate

Hi, Jenny ~ Earnest money is not required to be in contract, but it's common practice in my area to have this consideration. During negotiation, the original stays in the clients' folder. Since I scan the offer anyway to be e-mailed, including a copy of the check is not a problem. When there's a contract, I then drop the original off or snail mail it soonest to the listing agent and vice versa.

Jul 21, 2012 10:15 AM #103
Nan Jester
Exit Real Estate Gallery Jacksonville Beach, FL - Jacksonville Beach, FL
Realtor, Exit Real Estate Gallery

This isn't the only really stupid request from banks. Many of the things they request are useless and wastes tons of trees. I am ashamed of all of the paper I have to use and then destroy. I have said many times the tree industry must lobby the Real Estate Industry.

Jul 21, 2012 10:18 AM #104
Jenny Durling
L.A. Property Solutions - Los Angeles, CA
For Los Angeles real estate help 213-215-4758

Yolanda- I've heard many people say they 'put the check in the file" - in CA we have to deposit checks into a trust account, which is likely one reason most of us prefer to have the client deliver the deposit directly to escrow.

Nan- aint that the truth!!

Jul 21, 2012 10:50 AM #105
Rosemary Brooks
BMC Real Estate - 209-910-3706 - Stockton, CA
The Mother & Daughter Realty Team
This made me smile - the part about cashing a copy of your check. Most serious buyers don't blink an eye. However every now and then...
Jul 21, 2012 12:06 PM #106
Evelyn Kennedy
Alain Pinel Realtors - Alameda, CA
Alameda, Real Estate, Alameda, CA


As a listing agent I like to see a copy of a check and proof of funds.  Makes me and and my clients more disposed to accept that offer that includes a copy of the check and proof of funds.

Jul 21, 2012 01:48 PM #107
Frank Iglesias
Working With Houses, LLC - Atlanta Real Estate Investments - Lawrenceville, GA
Atlanta, GA Real Estate Investor

I agree with you Jenny and believe it is a complete waste of time.  Anybody can write anything down on a check without having a dime to their name so there isn't much point IMHO.  :-)

That being said, when an offer gets accepted, bank owned or not, then yes it makes sense to send one since it is actually going to be deposited somewhere.  No qualms there other than I wish more people would get on board with wiring and save the whole check writing thing or running around to overnight it when they are e-mailing the rest or driving halfway across town to deliver it (the worst).  

E-mail and wires when it matters.  The easiet transactions for everyone.  It just works!

Jul 21, 2012 03:00 PM #108
Doreen McPherson
Homesmart ~ Scottsdale ~ Tempe - Tempe, AZ
Phoenix Arizona Real Estate ~

Actually, a copy of a check can be deposited, if it contains the account number, etc.  

See comment 63 for an explanation of how that works, it, in fact, does not even need to be a copy of a check, it can be anything you can write the info on.  

It has happened to my dad more than once.  

Most checks never go to a bank, the information is sent electronically from the merchant to the bank and the money transferred from your account to theirs.  

Jul 21, 2012 04:20 PM #109
Kathryn Acciari
Century 21 Real Estate - Shrewsbury, MA
Brand Ambassador and Business Coach

It's my understanding that a real estate contract is not valid unless bound by some money. (A property gifted to another will often "sell" for $1.)  Thus the term "earnest money deposit." Shows that the buyer is indeed making an earnest offer and took the time to write the check to back it up.

On another note, I recently received an offer with copies of the $20 bills the buyer gave to his agent for his EMD. First time for that!

Jul 22, 2012 05:37 AM #110
Mary Padilla

What is even worse than this to me is dealing with Lenders who do not allow documents to be sent in a scanned and emailed version but REQUIRE that I fax it.  Really?  What difference does it make to them?  If there are any lenders out there who work with short sales on the selling end, please explain this to me.  I don't use a fax, but do use scanning and emailing.  Crazy stuff in this day and age of technology.

Jul 22, 2012 06:06 AM #111
Jenny Durling
L.A. Property Solutions - Los Angeles, CA
For Los Angeles real estate help 213-215-4758

LOL! Scanned $20's?! That's a riot!  As far a consideration necessary for a contract, it was pointed out in another comment that it's the purchase price that is the consideration, not the depost.

Mary - Yes, that's another rediculous requirement. I don't see that often but I do get "all documents must be sent together in one single PDF".  I guess we are simply stuck playing by their rules until they knock off the silliness.  Why anyone would prefer a fax over an email is beyond me. Faxes get illegible pretty quicklly!

Jul 22, 2012 06:15 AM #112
Gayle Beyer
Welcome Center Realty 772-336-8583, FLA777 - Port St Lucie, FL
Port St Lucie FL Real Estate Broker

I always collect escrow and preferably more than 1,000. I do deposit it into my escrow account per FREC Law. This ties the buyer in. On our contracts we can make the escrow due after acceptance but at least I have it, I am holding it and we can use it for multiple offers as we only attach it to the contract upon acceptance. But, I know I have a buyer who is not just going down the street the next day to another realtor. I shows me I have a relationship till the end with they buyer. If they won't give me an EMD while making offers what do I really have? How can I best represent my client if I don't feel they are my client. Anyone who is serious about buying a house should have no problem placing and escrow deposit with their one and only realtor. Short sales should have EMD due at time of acceptance and not bank approval.

Jul 23, 2012 02:59 AM #113
Pam Graham
All Real Estate Options - Jacksonville, FL
Jacksonville, Clay & St Johns Counties

Our contracts state how we are handling the EMD and we sign it stating we collected it. There's no reason for them to have a copy.

Jul 23, 2012 10:07 AM #114
Amy Steele Realtor SRS CNE NHS MRP
JP and Associates - North Richland Hills, TX
Live,Work, North Texas

Any listing or buyer's agent needs to see the EMD. We all need to know that the check has been written and is in the possession of whom it meeds to be. A broker a LOOOONG time ago said that the agent that did n't get the check as specified in the purchase agreement was liable for the money if submitting an offer when they didn't have the check that the offer purported to have already written and in their possession if the offer was accepted and the buyer decided to not write the check after all.

Jul 25, 2012 08:15 AM #115
MichelleCherie Carr Crowe Just Call...408-252-8900
Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

In Silicon Valley, we've found that it actually helps the buyer to psychologically recognize they are offering to buy the home. I've had buyers literally interpret the "3 days to deposit check" language as "I have 3 days to change my mind." No, it's not like buying a dress from Macy's and returning it the next day after wearing it at the party.

Jul 29, 2012 05:41 PM #116
Jenny Durling
L.A. Property Solutions - Los Angeles, CA
For Los Angeles real estate help 213-215-4758

Michelle- I actually had a friend in college that wore a dress to a party (left the tag on) and returned it! I wonder how common that is?!  It's fine to get a check from the buyer if that is their payment method of choice. I've not had any clients to date think of it as 3 days to change their mind. They've all come through with the deposit, no problem.

Jul 30, 2012 05:11 AM #117
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

We don't do that any more. All funds will be wired directly to the escrow. I do not use checks any more.

Apr 13, 2015 06:26 PM #118
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