When I make an offer on a home, who do I write the deposit (escrow deposit / earnest money deposit / binder check) to?
That is a very good question.
By the way, the terms “escrow deposit,” “earnest money deposit,” and “binder check” all mean the same thing in Florida real estate. It’s the money you put down at the time you make an offer on a house (or the money you put down when a seller accepts your offer). I’m going to use the word “binder” for this article.
You will typically write the binder to a Real Estate Company, a Title Agency, or an Attorney’s Office.
If you are a buyer, your Realtor will typically direct which agency to write it to.
At St. Augustine Team Realty, we have our buyers write it to one of the local title companies. On the day of closing, our agent goes to the title company and picks up the check and takes it to where the closing takes place. In some cases the binder has been deposited at the title company where the closing is taking place, so in that case the binder is already there.
Some agents that work for us prefer a different title company than the one I normally use, so they deposit it there instead. Some companies have their own escrow accounts (we have escrows for rentals, but not for sales), so their agents will deposit it into the company account. Some agents prefer working with closing attorneys, so it will go there.
In all cases the money is earmarked as part of your deposit for buying the house or property.
Can you lose your deposit?
That question is really the subect for a whole different article.
I am not an attorney, but my expereince has been that if you adhere to the contract…in other words if you show up and buy the house…you don’t lose the deposit. If the sale doesn’t go through it really depends on what the contract says (there are legitimate outs), and what the law says.
Under no circumstance should you ever write a binder check to an individual.
If a real estate agent asks you to write a binder to them personally, it is illegal. Report them IMMEDIATELY to their broker, and to the Florida Department of Business and Professional Regulation (DBPR).
What if you accidentally write it to your agent and mail it?
That puts the agent and broker in a weird place.
By law, any monies handed to us have to go into escrow. So when that happens, and it has happened us on some rare occassions, we have to call an attorney to tell us what to do!
Because even though we know it’s a binder for a property, and the title company knows it’s a binder for a property, it’s not written to either. And then the law says it has to go into escrow. That has made for some interesting mornings!
Oh, one last thing. It is the buyer’s decision where the money is placed in escrow.
It is not the seller’s decision and the seller cannot stipulate that you deposit it with their choice of real estate agency, title company or attorney.
The exception to that is when you buy a foreclosed property; the contract you have with the selling bank will typically stipulate that you put your deposit with their attorney or closing agency.