How to write your initial deposit check, or good faith deposit check, all wrong

Good checks acceptedHome 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!

 

 

 

If my real estate purchase offer is accepted, when will they cash my check?

Silicon Valley home buyers want to understand time frames, expectations and requirements when signing a purchase offer on real estate.  One of the most important to fully grasp is when the initial deposit check will go to escrow and be cashed.

The quick answer to the question about when the Silicon Valley real estate purchase offer check will be cashed:

Your initial deposit check or good faith deposit check (or wire transfer or other means of conveyance) is due within 3 business days of acceptance (also called “contract formation”) unless the contract is changed by checking the box and filling in the blank for a different answer.  By the way, everywhere else in the contract, time is measured by “days”, not “business days”. This is the one exception! (more…)