Home Buying in East Meadow>Question Details

ysh4928, Home Buyer in Queens, NY

When does the check for a down payment get cashed out?

Asked by ysh4928, Queens, NY Thu Mar 21, 2013

I have given a check for the down payment upon signing the contract. We got back the contract and the check has been cashed already. Is it supposed to be that way? I thought that the check will be cashed once we close the house?? I am not sure... Please advise...

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Javier Meneses’ answer
BEST ANSWER
No, that's the way it's supposed to be. The seller's attorney deposits your down payment into an escrow account and will be figured in towards the total amount you need to close. This is totally normal. I do suggest you speak about these things with the attorney, Realtor and/or Loan Officer you're working with. If you trust them enough to be a part of the biggest purchase you'll make in your life, then trust them to educate you on everything that's going on. In your case, unfortunately, it begins with you asking them these questions. Good luck!

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Javier Meneses
Senior Loan Officer
NMLS #23130
STERLING NATIONAL BANK
310 Crossways Park Drive
Woodbury, NY 11797
jmeneses@snb.com
(516) 606-9648
3 votes Thank Flag Link Thu Mar 21, 2013
NO, your deposit is deposited into the escrow account as soon as the contract becomes ratified by all receiving all parties signatures putting the home under contract.
0 votes Thank Flag Link Fri Aug 2, 2013
The down payment check must be deposited by the escrow account of the Seller's attorney. This is deemed to be protected until the outcome of the purchase. The down payment funds are deducted from the total purchase price. The funds will be disbursed at closing along with the remainder of the purchase price, if the closing moves forward. In the event that the sale does not move forward due to issues with the engineer's report or title defects, you may be entitled to a refund of the down payment amount. You should speak to your attorney about this ahead of time so that you are not surprised by any of the events that may unfold during the purchase process. Good Luck!

John A. Weber IV, Associate Broker
Bayview Estates Realty
(516) 777-0146
0 votes Thank Flag Link Fri Aug 2, 2013
After the contract is fully executed the check is deposited into the attorney's escrow account. That money is kept in the account until the day of the closing. At that time the funds from the escrow account will be released to the seller by the attorney. Should the sale not go through the money will be returned to you, unless you were in violation of the contract (typically willful default) at which time the seller has the right to keep your down payment. Good luck with the closing!
0 votes Thank Flag Link Sat Jun 29, 2013
Not sure why you are not asking your attorney the question....generally the check is deposited into an escrow account...
0 votes Thank Flag Link Thu Mar 21, 2013
Hello,

Your deposit check can be CASHED once you open escrow.

It has to be turned over to escrow within tree days of opening escrow.

They will cash the check upon receiving it.

Best of Luck on your new home!!!

Kawain Payne, Realtor
0 votes Thank Flag Link Thu Mar 21, 2013
The downpayment check is cashed upon signing the contract. This means the seller and buyer agree to the terms. The funds are normally placed in an escrow account by the sellers attorney during the loan process. At some point your bank may request an escrow letter. It is also normal for your attorney to request an escrow letter from the sellers attorney. An escrow letter confirms the funds were received and are being held.

Consult with your attorney if you have any additional questions. As well you can also contact me anytime @ 914-299-0420. I am available 24 hours.

Also, I have been following Javier Meneses below and he seems to know his stuff. I am sure you can also reach out to him
0 votes Thank Flag Link Thu Mar 21, 2013
That is the way it is. The down payment is cashed immediately.
0 votes Thank Flag Link Thu Mar 21, 2013
The DOWN PAYMENT check, (unlike the DEPOSIT CHECK) is "cashed" immediately:
The funds must be available in the Escrow account for everything to go forward.
The Down Payment check, however is not required until the Loan is in place and the Loan Contingency has been released.
0 votes Thank Flag Link Thu Mar 21, 2013
An earnest money check is typically cashed and deposited in a third party account such as Real Estate company or Attorney escrow account. This amount will be subtracted from the funds needed at closing or refunded if your contingencies in the offer are not met.
0 votes Thank Flag Link Thu Mar 21, 2013
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