Tag: first time home buyer

Many first-time and seasoned home buyers will ask me, “Where does the money go from the first deposit check?” and/or “When will they cash my check?” All money given as a deposit for real estate goes into an Escrow Account with the Listing Broker – unless the contract says that it is going to be held in another location.  Escrow accounts must be managed so that they follow the legal requirements of state and federal banking laws and real estate law.  The escrow money is counted as part of your total deposit and will be returned to you at the settlement. In Pennsylvania, an Earnest Money check is made & submitted with the contract when the offer is made.   The earnest money check is a check that proves that you are “earnest or serious ” about the offer that you have made for the property. If your settlement date is within 30 days of the contract date, your check must be a cashier’s check or bank check.  The listing broker needs to be sure that your check will clear the account before settlement which is why the bank check is requested. The listing broker must deposit the check by the end of the next business day into their escrow account as soon as the contract is executed. Execution of the contract means the time when both buyer and seller have come to an agreement about terms of the contract, price for the property and both parties have signed and initialed all changes that had been made to the contract during negotiation. Once you go to settlement your earnest & deposit money will be returned to you and you will use it as part of the money needed to purchase your new house. Congratulations on your new home! Contact me with any real estate questions that you may have at [email protected]