I just recently read an article published by MAR (the Maryland Association of Realtors) concerning Earnest Money. Earnest money is the deposit money you put down when you make an offer to purchase a home. This is important to the real estate transaction, so I thought I'd shed some light on the subject.
According to Section 17-502 of the Brokers Act, the agent who received the earnest money is supposed to PROMPTLY turn over the EMD to her broker, and that broker is supposed to deposit that money into a trust account PROMPTLY. Some brokers have a 48 hour rule, while some interpret promptly to mean within 7 days or so.
If clients ask to submit the offer, but to hold the check because it won't clear? Many realtors have been disciplined because of this. Or, what happens if the EMD check is deposited in a timely manner and it comes back NSF? The selling agent will disclose the information to the listing agent, then contact the broker and the client to see how the client can correct the problem.
The contract you sign when you make an offer should include who is holding your Earnest Money Deposit. In some instances, the funds are being held by a title company instead of the broker. Why would it matter if a broker vs a title company holds it?
If clients ask to submit the offer, but to hold the check because it won't clear? Many realtors have been disciplined because of this. Or, what happens if the EMD check is deposited in a timely manner and it comes back NSF? The selling agent will disclose the information to the listing agent, then contact the broker and the client to see how the client can correct the problem.
The contract you sign when you make an offer should include who is holding your Earnest Money Deposit. In some instances, the funds are being held by a title company instead of the broker. Why would it matter if a broker vs a title company holds it?
Also, it must be said that a Title Company may have different rules as to when it can release the Earnest Monies if a transaction doesn't go through. Title Companies are regulated by the Maryland Insurance Administration, and the Insurance Article of the Maryland Code does not specify how or when the Title Company may release the monies. Also, as a purchaser, it's important for you to know if deposited with a title company, if your money is going into a non interest or an interest bearing account. If it is an interest bearing account, then to whom will that interest be paid? You need to make sure that there's a written agreement signed by all parties, stating whatever terms everyone has agreed upon.
And you just thought you were writing a check, didn't you? Even though it seems complex, if you have a knowledgeable realtor who knows all these nuances, you shouldn't have a problem! If you ever have any questions about any parts of the transaction, please give me a call or send me an email. I'll be glad to help!
And you just thought you were writing a check, didn't you? Even though it seems complex, if you have a knowledgeable realtor who knows all these nuances, you shouldn't have a problem! If you ever have any questions about any parts of the transaction, please give me a call or send me an email. I'll be glad to help!
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