Escrow deposits…they can cause you the most trouble.
- If you put a deposit in a real estate company escrow account, you have to document that deposit: who, where, when.
- If you put that deposit in a title company, you have to get confirmation that the deposit is there.
- If you put the deposit in an attorney’s trust account, you need the same information: You need to document who, what and where of the deposit.
An attorney’s trust account is not subject to audit like a real estate company’s account. In fact, an attorney’s trust account is only audited when a complaint is filed against the attorney, whereas a real estate escrow account is subject to audit at any time. So you need to be careful where the deposit is placed and don’t make that decision for your customer, otherwise there might be liability on your side for suggesting where the deposit is placed.
If the transaction does not result in a sale, be very
specific and understand the contract that you are using or the other side is using so as not to jeopardize your Buyer’s deposit or your Seller’s position with respect to the deposit.
So my fellow Realtors, take care and understand all the nuances of escrow and you will have trouble-free transactions.
Until Next Monday…