Establishing Escrow Accounts

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Education & Training with REcampus Fully Accredited Florida ONLINE & Classroom Training in Destin, Pensacola Florida

 

Establishing Escrow Accounts

 

When earnest money is received, the broker must deposit it in an escrow account.  An escrow account is an account for the deposit of money held by a third party in trust for another for safekeeping.  Escrow deposits also called (trust funds) include cash, checks, and money orders and items that can be converted into cash such as deeds and personal property.

 

Brokers also hold in trust, rent and security deposits associated with leasing property.  Brokers are not required to keep earnest money deposits separate from rental deposits.  Earnest money is also referred to as good-faith deposits or binder deposits.

 

Florida law defines a deposit as money or its equivalent, delivered to a real estate licensee as earnest money, payment or partial payment in connection with a real estate transaction.

 

Escrow funds cannot be commingled with the broker's personal funds or operating funds. Commingling funds is the illegal practice of mixing a buyer, seller, tenant, or landlord funds with the broker's own money or mixing escrow money with the broker's personal or brokerage funds.

 

Types of monies that a broker handles

 

  • Sales deposits (earnest money)

  • Property management (rent)

  • Security deposits

  • Pet deposits

  • Maintenance deposits

  • Money paid by sellers for marketing expenses not covered by broker.

 

Posted by

Rowlett Real Estate School

Captain Wayne Rowlett Real Estate School


For infomation on Rowlett Real Estate School and our classes in Panama City, Fort Walton, Pensacola and Destin, visit our website at www.rowlettrealestateschool.com .  Or give Captain Wayne a call at 850-547-1333

Rowlett Real Estate School is a full service Florida Real Estate School offering classroom training in Panama Ctiy Beach Florida and Destin Florida, Fort Walton Beach and Pensacola.  We offer a full line up of courses online and in classroom for all your Sales Associate and Broker real estate license requirements.
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Rainmaker
2,600,538
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

The handling of Florida escrow accounts seem very similar to the way they are handled here in California.

Oct 30, 2014 08:28 PM #1
Rainmaker
4,797,822
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

After some shenanigans in the past, Wayne, our escrow rules have been made considerably more stringent in the past few years.

Oct 30, 2014 08:53 PM #2
Rainmaker
939,186
Bob Ratliff
Robert Ratliff Realty - San Antonio, TX
"Sold with Bob"

Captain Wayne, when I read about violations with Brokers it's usually because they commingled escrow/deposit moneys with their personal accounts. You make it very easy and simple to follow but some people/Brokers are just stupid.

Oct 30, 2014 08:59 PM #3
Rainmaker
5,506,563
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

This is a good lesson for real estate professionals. Great care must be taken with funds that belong to others.

Oct 31, 2014 12:51 AM #4
Rainmaker
310,855
Andy Brown-Climer School of Real Estate
The Climer School of Real Estate - Orlando, FL
The Best Real Estate School in Florida

Howdy Captain Bob!

 

Well written article! keep up the good work

Andy Brown
www.ClimerRealEstateSchool.com

Nov 01, 2014 09:49 AM #5
Rainmaker
2,072,127
Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Fort Worth, TX
Selling Homes Changing Lives

Wayne,

I trust what you say  because you don't just preach it, you teach it!

 

Nov 01, 2014 01:33 PM #6
Rainmaker
1,993,607
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Wayne - in New York the escrow is held by the sellers attorney.

Nov 01, 2014 11:05 PM #7
Rainmaker
2,051,103
Robert Bob Gilbert
Berkshire Hathaway HomeServices Anderson Properties - Katy, TX
Your Katy TX ( West of Houston) Real Estate Expert

Captain Wayne,

Good discussion of escrow accounts. I believe some folks do not understand that these funds collected have to be put into segregated accounts. 

Nov 02, 2014 01:57 AM #8
Rainmaker
1,675,429
Larry Johnston
Broker, Friends & Neighbors Real Estate and Elkhart County Subdivisions, LLC - Elkhart, IN
Broker,Friends & Neighbors Real Estate, Elkhart,IN

Hi Captain Wayne, If an agent doesn't remember anything else after school, they need to remember three things:  Earnest Money, Comingling and Jail.

They also need to remember which of those go together.

Nov 02, 2014 01:19 PM #9
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Rainmaker
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Captain Wayne - Rowlett Real Estate School

Rowlett Real Estate School / Owner and Instructor
"Let Your Career Start Here!"
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