Question guys, when you write the check for your earnest money, do they deposit the money right away, OR save it until closing??

Asked by marissabb, Salt Lake City, UT Tue May 7, 2013

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15
Rick Burton, Agent, Salt Lake City, UT
Tue Nov 26, 2013
Earnest money is deposited within 4 days of receipt, and held "in trust" in either the brokers trust account, or the title companies trust account. If all contingencies on the contract are met, and you proceed to closing - the amount of your earnest money is credited back to you on the HUD closing statement.
1 vote
Wendy Starli…, Agent, RIVERTON, UT
Tue May 7, 2013
It depends on whether or not you are purchasing a short sale. If you are buying a short sale, their is an addendum that states that the Earnest Money is not due until after the sellers lender approves your offer in writing. However, some sellers, or sellers agents, still want to see a photocopy of the earnest money check. This is silly, in my opinion, but I've seen it happen. In that case as the buyer, you can write the check, photocopy it, and then have your Realtor hold it in the file (get an Earnest Money Receipt from them) until such time as the Purchase Contract requires the EM to be deposited, which is 4 days after the sellers bank approves your offer in writing.

Any more questions, I'd love to help.

Wendy Starling
Starling Real Estate
801-759-1775
http://www.starlingrealestate.com
1 vote
Justin Critc…, Agent, Midvale, UT
Tue May 7, 2013
Most real estate contracts have up to 4 days after acceptance to deposit the earnest money in a trust account and then it is refunded/credited to you when you go to close on your home.
See why over 2000 people a month visit http://www.RealDealUtah

Justin Critchfield
Century 21 Everest
801-891-5489
http://www.RealDealUtah.com
1 vote
Nick Mason, Agent, Salt Lake City, UT
Tue Jul 15, 2014
I'm amazed at all of the answers that seem incorrect to me. Utah State Law requires that EM deposits are to be deposited within 3 days. While the Utah State Approved REPC may have the Seller and Buyer agree to another number of days, the State Requires 3 days for the deposit unless otherwise agreed upon by the Seller and Buyer.

There are countless different Purchase Contracts that are used in the State of Utah. For example, almost every homebuilder has their own contract that they use. These different contracts may specify all sorts of different time frames for the depositing of Earnest Money.

So in short, Earnest Money is to be deposited within 3 days unless agreed upon differently by the Buyer and Seller.

Nick Mason
Utah State Licensed Broker
0 votes
Daniel Fox, Agent, Sandy, UT
Tue Jun 24, 2014
The vast majority of the time at least in Utah you need to deposit the check within 4 days after acceptance, unless it state specifically in the REPC that something else will happen.
0 votes
J. Ryan Minor, Agent, Salt Lake City, UT
Thu Jan 30, 2014
There are two (2) different options that will determine when the Earnest Money will be due, depending on which box you select on the REPC as to when Earnest Money is going to be collected:
1) It is collected with the offer.
2) It is collected within four (4) calendar days after the offer is accepted and under contact.
*The Brokerage or Title company then has four (4) calendar days to deposit the Earnest Money into the trust account.
0 votes
Alexander Lo…, Agent, Sandy, UT
Thu Dec 12, 2013
I think the key thing here is the real estate purchase contract. While the standard is within 4 days, the contract can specify something else. For example, some contracts may have an addendum for a promissory note for the earnest money, with additional terms. Another person also gave the example of a short sale addendum, which will also change some timeframes. So, it really does depend on the specific contract.

Alexander Lovell
Equity Real Estate - Advantage
http://alexanderlovell.pro

If you have any additional questions, feel free to call me on my Cell phone, (801) 949-1194. I am available between 8am and 10pm Monday through Saturday.
0 votes
KARL-HEINZ F.…, Agent, Salt Lake City, UT
Mon Jul 8, 2013
Earnest Money should preferably be in check or cashier's check form and written for an amount that both Buyer and Seller both feel is sufficient for demonstrating that the Buyer is, in fact, Earnest. Typically that means 1% of Sales Price. It can often be for considerable amounts and In CASH, if Buyer so Directs in Writing... It is actually part of the Down Payment or "Initial Investment" and if the offer is a Low Offer, you may consider a Much Higher amount. That said, if the Earnest Money is greater than the combined Brokerage fees, then the Selling Broker has to write a check to the Title Company, to cover the brokerage fees for the Buyer's Brokerage fees.An exception to the general 1% guideline is, if you bid directly "Online" with companies such as "Auction,com, (Where the Amount is stated as 5% of the Sales Price) and or other such firms...Then the Amount is Directed by such firm and They state where the Earnest Money will be deposited., such as in Auction.com...directly to a Bank of their choosing in Irvine California, however, You should instruct Your Agent to write directly into your Documents,(REPC) after your auction has been declared the successful bid, and all required accompanying documents have been successfully received by such Company, .that the Monies will be Wired directly to such Bank and always get the Names of Sending Employee and Receiving Employee and then direct that said funds Shall be transferred to Your Choice, or sometimes Their Choice, of The Closing Title Company...This keeps local control of your Funds, since many of the auction companies may not have Utah Brokerage licenses...Any Questions can be Text or called into 801-298-1234
Karl Koenig
Realtor Since 1973
Utah Select Realty Inc.
UtahTopNegotiator.com
0 votes
KARL-HEINZ F.…, Agent, Salt Lake City, UT
Sun Jul 7, 2013
Earnest Money can be placed several different ways. As a Realtor since 1973, I prefer that Earnest Money checks be written directly to the selling brokerage company name,( ie. "Utah Select Realty/Trust Acct.") followed by.../Trust Acct., so that it can not be accidentally be used for Brokerage "General" expenditures, but is actually in that Trust Account. Second choice is to make the EM check payable directly to the Title Company/Trust Acct. of any reputable local Title Co. and Third choice is to pay it Directly to the Seller...Always get a receipt signed by the responsible party... Call or Text me for more information on the option and real life experiences or reasons to choose certain options........ Karl Koenig UtahRealtorKing@gmail.com 801-298-1234
0 votes
Cameron White, Agent, Salt Lake City, UT
Fri May 10, 2013
When you are putting in an offer for a home, there will be two options where you can decide if you want to hand the earnest money check to the Buyer's Brokerage (your agent) WITH the offer, or if you want to hand the earnest money check to the Buyer's Brokerage 4 calendar days after the offer has been accepted by the Seller. When you end up physically giving the earnest money check over to the Buyer's Brokerage, whether you chose option #1 or option #2, they have 4 calendar days to deposit that earnest money check into an account.

I'd be more than happy to answer any other questions that you may have.

Cameron White
Value Real Estate
801-258-1208
0 votes
Emily Webb J…, Agent, Midvale, UT
Tue May 7, 2013
Once your contract is accepted and you are officially under contract is when your Earnest Money is deposited. Some agents keep them at the brokerage, others deposit with a title company. The best thing is communicate with your agent about what they will be doing with that funds.
I had a client ask me "how does the bank know that I paid the earnest money?"
Your agent will let your lender know where the Earnest Money is being held, and how much. The Lender will know that the funds are in house and will include those in your down payment or closing costs.
When I was 21 and bought my first home my Agent did not educate me on Earnest Money at all and I got into this business so that other first time home buyers would not have the same experience I did.

Emily Jones
Keller Williams Midvale
801-577-2472
0 votes
oknothere, Landlord, salt lake city, UT
Tue May 7, 2013
Once the offer is accepted the funds are deposited in a trust account. See Code R162-4-2. Trust Accounts at this link: http://realestate.utah.gov/R162_effective_06-21-10.pdf

Any check that is written must be written on good funds because it will ultimately be deposited.
0 votes
Dustin Brohm, Agent, Salt Lake City, UT
Tue May 7, 2013
The check will be cashed right away and deposited in the Trust account of the Title Company/Brokerage you are using to hold it. The amount of the Earnest Money check will obviously be applied towards the purchase price of the home.

Sounds like you have a home Under Contract. Congratulations!!
0 votes
Ron Thomas, Agent, Fresno, CA
Tue May 7, 2013
Here, the DEPOSIT cannot be cashed/deposited until the Contract is signed.
Then the Title Company puts it in the Escrow.
0 votes
Justin Colem…, Mortgage Broker Or Lender, Park City, UT
Tue May 7, 2013
It should be deposited in the Trust account of the Realty or the Title company.
0 votes
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