Question Details

Ari2011, Home Buyer in Farmington, CT

When will the earnest money check be cashed?

Asked by Ari2011, Farmington, CT Tue Sep 20, 2011

Hello, we handed over $1,000 in earnest money to the realtors about 2 months ago on a short sale.
Problem is, I put too much money into my ING savings over the weekend and now I am under the 1k by about $20.
I transferred enough of it back into my checking from the ING but I don't think it will be in there until tomorrow or Thursday or something.
A couple questions:
We upped our offer on a short sale and we certainly may have it this time. Perhaps they will know today, tomorrow, or what the heck- even next week. But they've been prompt during each counter.
When will the realtors cash it?
Also, if I get overdrawn from this, or if the mortgage people see that there was a day the funds wouldn't have been covered, will I get penalized?
What if the realtors use my bank and they can't cash my check, will this break the deal? I'd think they'd at least give it another day, right?
I CANNOT believe I transferred too much. I don't know what I was thinking.

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Answers

3
Ask your agent. Hopefully you're using your own Buyer's Agent to represent you and NOT the listing agents? When buying a short sale, I NEVER tell my buyer to submit earnest money until after we get short sale acceptance from the bank. This can be easily written into the contract. Sometimes agents just hang onto the check and hand it over to the title/escrow company at closing. Other times, they hand it to the titlecompany immediately and it gets deposited in an escrow account.

Also, in CO we have "Closing Instructions" that must be signed by both parties. This document specifies who will hold the earnest money, and who is handling closing. Do you have something like this or is it specified in the contract?
0 votes Thank Flag Link Tue Sep 20, 2011
Ari2011, You would need to read your contract with the seller to see when your good faith deposit will be deposited into the bank. In many instances, there is a clause that would preclude the money being deposited until the bank has approved the short sale in writing. This may be the situation, if you have not heard anything from your bank about the funds not being available. You should contact your agent and let him/her know what has occurred. We all make mistakes. It is always best to be up front with what happened in case it becomes an issue.
0 votes Thank Flag Link Tue Sep 20, 2011
not sure about Massachusetts, but in Florida it is immediately put into an escrow account. Ask your Realtor about your check, who has it, has it been deposited, if not, when will it be.
0 votes Thank Flag Link Tue Sep 20, 2011
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