Why is my Earnest Money Check Cashed?

Reblogger David Burrows
Real Estate Agent with Classic Realty Realtor

I have often had people ask questions about what happens with my Earnest Money Check. Most important, is it Cashed? For sure, all of us as Realtors®should be ready to answer. Joan Cox, Denver Realtor®handles the topic very well and I urge you to take a moment to read. It will take just a few moments to do so. Thanks Joan for a great post today!

Original content by Joan Cox DRE# ER40011786

Why is my Earnest Money Check Cashed?


Earnest Money Check 

 If my earnest money is to be used for the final amount at closing, why do they cash my check?    This is a common question, but your earnest money is a promise to pay and good faith to continue with this transaction.     If you had nothing on the table to lose, buyers may walk away from a transaction quicker.      If a transaction is to close in a short period of time, good funds will be needed, rather than waiting for a personal check to clear the bank.     


I always remind my buyers the check WILL BE CASHED, and to be sure the funds are available in the account before delivering the earnest money check.     If this check bounces, it is a sure sign the transaction will not go to closing!


This good faith money will be reduced from the total amount you will need at closing.      Typically it is held at the Title Company on behalf of the buyer.     If there are bumps in the road, and the buyer opts to terminate, two forms Notice to Terminate and Earnest Money Release will need to be signed by both buyer and seller for the earnest money to be returned to buyer.


As a Denver REALTOR® I can guide you through the Denver home buying process with ease.    Give me a call and we can get started with the Denver home purchase!




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Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Thank you for the re-blog David!

Apr 24, 2013 11:26 AM #1
Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate

David:  As there are many differences between states... in Texas the buyer's earnest money check is given to the Title Company... which then cashes it and deposits the money into the escrow account.  A slight difference.  If the buyer does not produce the earnest money, or if it bounces... technically the buyer's offer has not been fully completed, and the home can easily become available (back on the market) again.

Apr 24, 2013 03:01 PM #2
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

It's cashed because it is supposed to be cashed to complete the contract. Unfortunately from time to time, I see people play games with deposit checks.

Apr 24, 2013 07:26 PM #3
Will Nesbitt
Nesbitt Realty at Condo Alexandria - Alexandria, VA
Nesbitt Realty is a family-run brokerage.

Interesting reblog on why earnest money checks are cashed. Keep up the good work David Burrows! Thanks for sharing this interesting article with the active rain community. Have a nice day.

Apr 24, 2013 11:31 PM #4
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

I am so glad you re-blogged this post.  When asked this question, the first thought in my head is always, "Why not?"  It shows you are earnest about purchasing the property.

Apr 25, 2013 12:28 AM #5
Yolanda Cordova-Gilbert
Richmond, TX


 I love the re-blog and I had a client once change his mind and wanted his deposit back ( after 6 months ) ! Thanks for the kind words on my blog!

Apr 25, 2013 04:56 AM #6
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Good choice for a re-blog.  Many buyers do not fully understand the process.

Apr 25, 2013 09:50 PM #7
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