I learn something new, in this business, everyday!

Reblogger Scott Fogleman
Real Estate Agent with New Home Team 804-573-9592 VA#0225195155

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.

Original content by Alan May

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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Rainer
398,295
Dan Hopper
Keller Williams Realty Downtown LLC - Denver, CO
Denver Realtor / Author / Advocate/Short Sale

A nice topic to re-address on that one issue with EM checks, SCOTT FOGLEMAN .   The bottom line, when presenting or submitting offers, is to communicate with the appropriate parties, immediately,  about the offer.

Jan 10, 2016 06:41 AM #1
Rainmaker
518,968
David Gibson CNE, 719-304-4684 ~ Colorado Springs Relocation
Colorado Real Estate Advisers LLC - Colorado Springs, CO
Relocation, Luxury & Lifestyle residential

Scott,
One of the best real estate attorneys’ in our state was asked a question at a large agent gathering. He answered “it depends.” Depends on what? He said, “whoever calls me first.” 

Jan 10, 2016 07:06 AM #2
Rainmaker
3,977,511
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

The law really bends to the buyer in almost every case...thinking a short cut will speed it up will only make it worse

Jan 10, 2016 07:20 AM #3
Rainer
353,078
DEANNA EARLY - - ( NMLS # 268590 )
American National Bank & Trust - Smith Mountain Lake, VA
Highest Ranked Mortgage Loan Originator Virginia

Communication is crucial in every contract Scott Fogleman whether the agent is new or not.   Snail mail should always be a last option in meeting a deadline obligation but communicating can change the breach into a minor delay we can work through.

Jan 17, 2016 10:18 AM #4
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