You should absolutely not be giving your agent a check for $9k. Even when you do submit an offer on a property you can submit a "copy" of your check with the offer - then if the offer is ratified you can send your initial deposit directly to the title company.
This is highly unusual and we need more information from you regarding this situation but I would not do this if I were you. How did you find this agent?
Paragon Real Estate Group DRE 01844627
It has become a standard for some in the industry to want to hedge their bets, so to speak, by requiring legitimate prospects to commit to something, and you can't blame creative agent for doing his/her part to getting that sort of commitment if you in fact want to buy, e.g., invest time with that agent and vice-versa. You see, all agents are on some form of commission pay, and at the end of the day, if you opt to go see 20 or 50 houses on that agent's time, and buy through someone else, you've effectively cost that agent money they would not have spent if they knew you were going to use such a strategy.
That being said, it is not a mandate written anywhere that a buyer has to pay anything given the description you've outlined, dubious, yes, but not totally illegitimate.
While not extremely typical, there are times when an agent will hold trust funds for various reasons but if he used the term "good faith' or "earnest money" and the term deposit there should be an offer involved. The law allows us as agents to hold clients' funds in trust accounts for specific purposes such as paying for advertising, repairs or inspections - but this is different and not considered "earnest money"
I think it is important to understand the difference between legal, legitimate and typical since most of these answers deal with what is typical. From what you have said, it sounds bad - but I can think of at least one scenario where it is legitimate but pushy so I disagree with the wholesale condemnation many of my peers have vocalized.
If your budget is $300k in San Francisco, a good agent may be acting pushy to ensure you get an opportunity to purchase something market rate and attractive and in that price range you will have to act fast against the next buyer trying to get into San Francisco at $300k I am sure you have noticed tics and condos can cost a lot more than that out here - and you said "house." If your realtor wants you to have your money ready I don't blame him: there is room for an ethical realtor to have asked you for the good faith deposit - just not much.
I've never heard of a circumstance that would warrant a deposit as you described.
You may want to consider another agent from the list below.
However you said you have not requested to put an offer on any house. To me, the amound $9,000 implies an offer price of $300k which it is 3% of but without a property how would your realtor know this to be the amount? As many of us have said, this does not sound legitimate or typical. Without knowing the entire story none of us have the information to say for sure. From what you have said, it does not seem legitimate.
you can usually do so at no cost to you, they get paid their commission from the fee advertsised in MLS by the listing agent and paid at closing. This way they can get the information for you and you will have someone assisting you through each step of the buying process.
Are they a Licensed agent?
You can look an agent up by name here:
If you can't get direct answers, you should consider seeking help elsewhere with someone you trust. You can cancel out of your buyers agreement for any reason.
I'm all for trying to work it out, but you should not go through with something that is so questionable.
Please reply with the outcome.
Rachel LaMar, J.D.
LaMar Real Estate, Inc.
If the agent is collecting any up front fees he needs to have authorization from the Department of Real Estate(DRE) and the document must be approved by the DRE.
Get further clarification from the agent.
We can see how signals can get crossed and as others have stated perhaps you were being asked for proof of funds.
Bonnie Chernin and David Rogoff
Fillmore Real Estate Branch #19
2926 Avenue J
Brooklyn NY 11210
917-593-4068 (Davidâ€™s Cell)
646-318-5031 (Bonnieâ€™s Cell)
Ask your agent to explain it clearly, and better yet , in writing.
Prrudential California Realty / La Jolla.
Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
REALTORSÂ® shall keep in a special account in an appropriate financial institution, separated from their own funds, monies coming into their possession in trust for other persons, such as escrows, trust funds, clientsâ€™ monies, and other like items."
If they persist, point to the Golden Gate and suggest the agent take a leap! Consult an attorney or report the agent to the local Association of Realtors in you area.
Best of luck!
If anything your agent is acting in bad faith!
Without any specific property in mind the only possible way money could be held by anyone apart from an escrow company would have to be by a broker (not an agent) and there are strict guidelines for that circumstance too.
As an aside don't fall for it if your agent says the 'deposit' is akin to a lawyer's retainer fee. Even if it was legal retainer lawyers are also required to abide by an explicit contract with the client that directs the lawyer to deposit retainer monies into a segregated/trust account that can only be drawn upon when work is actually done.
Is the agent's company called Cheetam and Hyde? Lame joke aside, check out what the DRE says about it with the link below. Hope this helps!
Kevin K. Ho, Esq.
Broker Agent Vanguard Properties
The only reason I can think of that an agent/broker should be asking for a deposit is because you have made an offer on a property that was accepted. Additionally, the check should be made out to a title company. Who was this check supposed to be made out to?
My suggestion is to find a different Realtor to work with. You want someone who has your best interests in mind.
Hope this helps!
Alain Pinel Realtors
Never give a good faith deposit without an offer. And when in question, make it out the the escrow company that the seller is using. Seller usually picks services, so ask the agent to find out which escrow company is being used for the home you are interested in.
If you are really concerned you can take the check to the escrow company yourself.
You definitely need an explanation regarding this abnormal request (please let us know what you find out).
In the meantime, just for "fun", see if you can find your agent on any of these sites:
Check the status of a DRE Licensee and their Broker (and past violations) here:
Check for Desist and Refrain Orders, and Unlicensed Activities here:
Are you sure they didn't say, if you make an offer?
If I were you, I would say goodbye to the realtor and get another. This is unheard of in my opinion. If there is not some error on what you heard you need to get out of that relationship.
Good luck Bd,
A 3% "good faith" deposit is customary in San Francsico WHEN you are putting an offer on a home. Who does he/she want the check made out to? A good faith deposit would only be made out to the titel company.
Lorraine Meier RealtorÂ®
Zephyr Real Estate
2523 California St, S.F., CA 94115
I've never heard of such a thing but I'm not from California.
Often after you have written an offer, it may be necessary to show 'proof of funds' for cash offers. But this only involves providing a letter from your lender that you have the money in your account.
I'm confused as to why they would need this money even before you have written an offer.