Home Buying in Philadelphia>Question Details

Jacquelyn Ta…, Home Buyer in Lansdowne, PA

Earnest deposit made; seller agrees to make home inspector repairs. Is buyer's earnest deposit being used for repairs?

Asked by Jacquelyn Taylor, Lansdowne, PA Fri Jun 21, 2013

Seller has agreed to make changes based on inspectors recommended repairs to avoid paying a credit at settlement. After agreement, earnest deposit was immediately cash. Shouldn't this money be held in escrow? Is it legal for the seller to use escrow funds paid by buyer to make repairs?

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Answers

6
Your earnest money should be deposited into listing companies escrow account and not be touched until it is brought to the closing table to go toward your closing costs.
0 votes Thank Flag Link Sun Jun 23, 2013
The answer should be no why because the LAW states it has to be in escrow and released at settlement as part of your down payment.

Philip J. Cunningham Sr.
V.I.P. Realty Corporation
7942 Bustleton Ave
Philadelphia, PA 19152
215-725-5700X49
philcunningham2004@yahoo.com
Web Reference: http://www.GreatPaRE.com
0 votes Thank Flag Link Sat Jun 22, 2013
Earnest deposit is not used to make repairs. Earnest deposit goes toward your closing costs and is brought to settlement by listing agent.
0 votes Thank Flag Link Sat Jun 22, 2013
The earnest money deposit is required to be held in escrow and it goes toward your down payment and/or closing costs at settlement. The check should always be cashed and then held in escrow typically at the listing agent's broker account. If the check is never cashed then you never truly made a deposit.
Typically you sign an addendum with the seller that they will make repairs to the property the addendum would state if the terms of the contract are being changed or if terms remain the same and seller just agrees to make repairs.
Your agent or lender should be explaining this to you as it seems you are already under contract.

John R. Thomas
NMLS 38783
Primary Residential Mortgage
610-906-3109
0 votes Thank Flag Link Sat Jun 22, 2013
Your earnest deposit should immediately be deposited into an escrow account.

Why are you assuming that the earnest deposit funds are being used for repairs?
0 votes Thank Flag Link Fri Jun 21, 2013
Assuming you are both represented by brokers, the escrow funds are held in a separate account by the seller's broker. The money remains there until either the sale is consummated at settlement or the agreement is terminated prior to that.

Escrow funds cannot be dispersed to either party without written consent of both parties involved.

Unless something shady is going on that I don't know about, the seller is paying for the repairs themselves.

Who did you make the escrow deposit out to?

Warmest regards,

Joshua Stein, REALTOR®
Coldwell Banker Preferred – Conshohocken

Office:(610) 828-9558 * Cell: (215) 866-8030
Direct:(484) 270-1165 * Fax: (215) 999-5894
Email: jstein@cbpref.com
Web: http://www.joshuasteinhomes.com

PA License #RS317975
0 votes Thank Flag Link Fri Jun 21, 2013
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