Has this ever happened to You!! - Posted by Sherry W

Posted by Rob FL on February 01, 2001 at 11:37:54:

That being the case, you are right that it wasn’t a good idea to escrow the money with them. Conflict of interest.

I’m a broker and I never hold escrow money for my clients (or myself) except for HUD and VA sales where it is required. Too much liability in my opinion.

Has this ever happened to You!! - Posted by Sherry W

Posted by Sherry W on January 30, 2001 at 09:50:44:

Hi,

I have a buyer for my house(I think I do) and they do not want to give me the binder deposit($500.00). Their deposit will go to Century 21 and be put in escrow acct.

The buyer wants to give the deposit to their Mortgage broker who is finding them the financing they need.

Is it normal for the buyer to want to do this? They had a bad ordeal with a seller about 4 mos. ago and they act scared.(This seller was asking for $5000.00 binder deposit).

Century 21 has drawed a contract up for me. And I wanted them to keep the deposit until closing.

The buyers say they want the house and the lender is trying to get financing for them. But who they are going thru told them to give him the deposit to hold.

Please any advice.

Sherry W

Re: Has this ever happened to You!! - Posted by Shenesa

Posted by Shenesa on January 30, 2001 at 11:10:06:

I would like to share a story with you about a friend of mine. My friend and his wife located a house that they wanted to purchase. The seller was a contractor and the wife was an realestate agent. Anyway my friend and his wife gave $1000 deposit made out to the realestate business of the wife. Wrong MOVE. Anyway they got the paper work together and everything was moving pretty smoothly. Then the title search came back and found that the house had a lien on it and a second mortgage. Ouch!! My friend requested his $1000 deposit back and still have not received it and this was in October 2000. The guy does not want to give my friend back his money. Needless to say he is going to small claims court and sewing for the $1000, a days wage and any other fees that may result in this case. I told him next time have the money put in escrow with his title company or attorney.

Lesson Learned!

Shenesa,NY

Re: Has this ever happened to You!! - Posted by Rob FL

Posted by Rob FL on January 30, 2001 at 10:22:01:

If you were in the buyer’s shoes, would you want to give $500 to a complete stranger. No disrespect intended, but the buyer doesn’t know if you even own the property, are about to declare bankruptcy, just got out of prison for grand theft, or are taking a 5-year vacation to Tahiti staring the moment you get your hands on the money.

Brokers, escrow companies, and lawyers have strict laws regarding escrow accounts and usually have E&O insurance in case a problem ever arises.

I wouldn’t take Brad’s advice to seriously about $50 binder deposits unless (a) you are dealing with morons, or (2) you are dealing with people who are ready to walk away from the property. Just my .02, no offense intended to Brad.

Re: Has this ever happened to You!! - Posted by Brad (SavGA)

Posted by Brad (SavGA) on January 30, 2001 at 10:03:14:

Hi Sherry, I’m thinking that the buyers have a bad taste in their mouth from a past experience.

I’ll give you an example of a bad experience that happened to me a couple of months ago:

We put an offer on a house in Oct and put $1000.00 deposit to realtor. In December, we put another offer in on the same house with $100.00 deposit and it was accepted. Well, low and behold, a couple days later, we start getting bounced checks coming in. The realtor had used the check that we had written two month earlier as deposit money.

She cashed the 1000. check instead of the 100. check, after we told her to discard the 1000. check two months earlier.

It was a big mess to say the least, but we got it all figured out and the agency paid for everything including our original deposit for our troubles.

Point is, these people could have had a bad experience with deposit money and don’t want to take another chance with it happening again.

From now on, I’m only putting up $50.00 deposit for all offers.

I hope it works out for you!

Re: Has this ever happened to You!! - Posted by Matt B

Posted by Matt B on January 30, 2001 at 09:54:46:

I have had this happen several times. Makes perfect sense that the buyer would want to make sure their funds were protected. When you’re dealing with a real estate agency, why not take advantage of the ability to escrow your deposit? People are flaky and I wouldn’t want to put any money directly into a seller’s hand in that situation.

Re: Has this ever happened to You!! - Posted by Rob FL

Posted by Rob FL on January 31, 2001 at 10:52:39:

What’s the difference between a Realtor’s escrow account and the escrow account of an attorney or title company? I know that they report to different governmental agencies, but they all have to abide by the ethical and legal standards of their profession or risk jeopardizing their licenses.

If the other party to the transaction has a dispute over the deposit money, the attorney or title company is not going to release it either. You end up with the same result.

Re: Has this ever happened to You!! - Posted by Sherry W

Posted by Sherry W on January 30, 2001 at 23:19:01:

I’m trying to get the buyer to put it in Century 21 escrow acct. my realtor wants it made out to Century 21.

Can everyone tell this is my first retail sell. I sure hope it gets easier.

And I don’t have to deal with this mortgage broker again. He has been a real pain…(buyer’s mortg. broker). Thanks for the advice.

Re: Has this ever happened to You!! - Posted by Shenesa

Posted by Shenesa on January 31, 2001 at 11:49:41:

Hi Rob,

With my friends situation, he made the check out to the agency owned by the wife therefore making it more difficult to get the money back. I think they spent the money before the closing. I think it would have been easier to retrieve the money from his attorney or title company due to the result of the title search.

I will advise him to report her to the Realtors Board.

Thanks,
Shenesa