Home Buying in Highland>Question Details

Gina Rice, Home Buyer in Highland, CA

a Brokers Trust Account

Asked by Gina Rice, Highland, CA Tue Aug 13, 2013

A real estate agent showed me a home, I liked it, and I wrote an offer. The agent wanted me to write a check payable to his company for the DEPOSIT on the home.
I asked him where the money went ?
and I was told it went into the general fund of his company, and that If I won the purchase, his company would write a check for my deposit and he will put it into the escrow company.
"Humm" I said, something is fishy. Why does my deposit go into his general business account ?
and Why can't I make the check payable to an escrow company ?
He could not answer any of these questions.
Can anyone help ?
Gina Rice

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Answers

6
Gina
It is Far Better idea to write the check out payable to Title Company or Escrow Company.
These companies are regulated harder then the Bureau of Real Estate, formally the Department of Real Estate.
Also, Title and Escrow companies tend to hold stranger Bonds then BRE Real Estate offices.

You are the Principal to a transaction, you have the right to direct your representative how you want the check to go, and when to go. If your agent does not like your choice, he/she can leave.
Call me, I will write up your transaction(s)
Russ Lambert
Broker Associate
0 votes Thank Flag Link Tue Sep 17, 2013
Good Morning Gina,
Good of you to question this. in Florida, escrow $$ MUST go into an escrow account, either the broker's or closing agent (atty or title co). Putting escrow in the broker's operating accoutn is grounds for serious discipline.
Maybe the agent mis-spoke. He may not know how the company works.
I would agree with you, but am not familiar with how it works in California.
0 votes Thank Flag Link Wed Aug 14, 2013
John S's and Cindy D's answers are right on the money.
Good Job Guys.....

Gina, if any agent lacks the proper understanding of Deposits and Escrows, RUN. Get Out...
find another agent....

If this agent had a hard time answering an easy question, what could happen if you had a serious problem?

A more professional approach would have been to say " I don't know the answer, let me find out and get back to you ". or, " I can steer you in the right direction to find out the solution "..

Anyway, if you need professional service, please give John, Cindy or I a call, and I;m sure one of us would love to earn your business.

God Bless
Russ Lambert
Broker Associate
Kivett Teeters, HIghland California
0 votes Thank Flag Link Tue Aug 13, 2013
This could be a communication issue or a legal problem, depending on the actual circumstances. Many agents don't know the correct jargon for managing a trust account and cause more confusion than they should, but the truth is that a single trust account can be used to hold deposit checks from all the broker's buyers as long as the amount belonging to each buyer is properly recorded in a ledger that meets Bureau of Real Estate requirements.
Certainly your deposit should never go into a broker's general business account, that is a clear violation of real estate law and a broker is guaranteed to face suspension or permanent loss of their license for this type of infraction.
In the old days, before the Internet or electric lights, buyers always included a deposit check with their offer. I haven't taken a check from a buyer in 10 years and never intend to in the future. I don't have a trust account and I'm not the only broker who stays out of trouble by doing that. If the seller wants to see a deposit check with offers, I ask the buyer to write a check payable to the escrow company and make a copy of it. We use a black marker to strike out the routing and account numbers and any other sensitive information that is printed on the copy of the check. I tell the buyer to hold on to the actual check and we state in the offer that the buyer (NOT ME) will deliver the check to escrow within 24 hours after acceptance of the buyer's offer. I highly recommend you consider this process for your next offer if the offer you've made already doesn't pan out. Don't let an agent say "that's not the way it's done" - that's BS. It's your money, so it's done any way you want it.
0 votes Thank Flag Link Tue Aug 13, 2013
You should be able to make a check out to an escrow company...this sounds very fishy. Good for you for questioning it. Insist on writing the check directly to escrow...

Good luck.
0 votes Thank Flag Link Tue Aug 13, 2013
Gina
The BRE / aka the DRE, Department / Bureau of Real Estate, states that any money that is not earned, that is held in deposit, needs to go into an independent trust account.
Meaning that the funds are yours until earned by the entity holding the funds.
Such as a Lawyer holding money pending the use of the funds for a case.
or the Deposit held by a landlord pending you evicting the unit with no or little damage.
Or holding a car pending getting the financing.. blah blah blah
Your Real Estate agent did not Borrow the funds from you, and you did not invest into his company.
the money is to be used for deposit. The money needs to be held in trust, in an Un-Entity not a general account.
and yes, the money and offer is yours, you can offer what you want, and you can make the check to who ever you want.
Russ
0 votes Thank Flag Link Tue Aug 13, 2013
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