 |
About Buyer's Deposit |
| |
 |
Its about the buyer's deposit that the broker keeps in an escrow account. Why does a broker keep it in a escrow account? Is it to protect buyer/seller or to keep an agents commission secure? |
| |
| |
 |
The earnest money is there as proof to the seller that the buyer means business and has something to lose by just backing out of the deal. But the seller isn't really entitled to get it until there's a transfer of title. So it's held, sometimes not by a broker but by a lawyer or even by a court.
There's a lot of question about who an earnest money deposit belongs to. Neither the buyer nor the seller nor the broker really owns it. Escrow represents a sort of legal limbo, with the money available to be given, eventually, to the seller, or else returned to the buyer. The seller's payment of commission to the broker is really a separate matter, though if the seller says so, it could be used toward commission just to simplify bookkeeping.
If a deal falls through, the broker can't dispose of the money without written agreement from both seller and buyer. When that doesn't happen, sometimes a broker will just turn the money over to a court to be held there. |
| |
|
Edith
Originally published on November 7, 2007 |
| |
| |
|
Back to Summary
|
< Previous | Next > |
| |
|
|
