Home buyers might be surprised that there’s a right and wrong way to draft the check for the initial deposit or earnest money when a real estate contract is presented here in Silicon Valley.
Right way – Be Specific:
- Find out the name of the title company and make the check payable to that particular title company
- Put the property address in the memo line
- Write a new check for every offer
Wrong Way – :
- Leave a big, blank space and write only Title Company in the “to” line
- Write a generic initial deposit number that has nothing to do with your offer (not 3% of the offer amount)
- Leave the date blank so that your agent or someone else can fill in the date later (with different hand writing & ink)
Why does it matter? The first way, the seller and listing agent know that you are interested enough to find out where escrow is opened and to write a check for this particular property. The second way is as if you are throwing spaghetti at a wall to see if it will stick. (Yes, throwing cooked spaghetti at a wall IS a good way to know if it’s cooked, but it doesn’t work well for much else in life.)
Perhaps if your offer is the only one, the effort you put in with this small detail will seem moot. But if you are up against multiple offers, shortcuts on your part, or your agent’s, will count against you. Put it this way: if you don’t look serious when you’re trying to make a good impression (think of a courtship), how will you be in escrow (think marriage)? If it’s bumpy now, it doesn’t bode well for the future – and you might be eliminated from the running since you’ve failed to make a better first impression. So slow down and do it right!
