Real Estate Investing Basics

A Primer on Escrowed Funds

Expertise:
21 Articles Written
Upon signing the agreement of sale in most residential real estate transactions, the buyer pays an “earnest money deposit”, which signifies his intention to purchase the property. Typically, the earnest money deposit is held in the escrow account of the listing broker (who represents the seller) and is applied toward the buyer’s down payment and [...] View the full article: A Primer on Escrowed Funds on The BiggerPockets Blog. This content is Copyright © 2017 BiggerPockets, Inc. All Rights Reserved.
    Christian N. Folland
    Replied almost 12 years ago
    It is also important to review the contract carefully because many of the Realtor contracts include provisions such as if the buyer defaults, and the seller is able retain the deposits as damages, the Realtor will receive half the funds.
    Larry
    Replied over 8 years ago
    Why cant I simply refuse to put up escrow money? It is absurd to think that a multi-billion dollar bank will agree to lend me a quarter-of-a-million dollars just by signing some ink to a piece of paper to buy the house and wait 30 years to be paid back in full; but an individual seller has to have some of my cash to close the deal. I think that is a tool (trick) thought up by the real estate people to keep me locked into the deal or lose my escrow money. I know the money in escrow is applied towards the purchase price, but that is only if the deal goes through. If the deal falls apart, for >> any << reason, sellers fault, agents fault, my fault, banks fault, etc., I should not be penalized thousands of dollars. There are just way to many homes available for me to be trapped into giving over thousands of dollars in escorw money to simply have the privilege of buying a house. Buying from owners directly (a FSBO) has not required escrow money.