Nathan Gesner, Broker / Property Manager (American West Realty and Management)

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Rainmaker
869,101
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

Buyer and seller can dictate the terms. As long as it's legal, you can agree to do what you want with the deposit.

Oct 16, 2017 08:08 PM
Rainmaker
3,958,595
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hi Nathan -- it has nothing to do with Calfornia(well, almost nothing) but everything to do with what is expressed in the contract...anything/everything can be changed...and as long as an agreement is reached with both principals..and legal...oops...too Californian for you?

Consult your attorney...

Or shaman, psychic adviser or...

Oct 16, 2017 09:51 PM
Rainmaker
3,908,646
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

I have no idea... depends on the rules in your state. I have to submit any earnest monies due within a couple of days to my brokerage and then it's placed into an escrow account.

Oct 17, 2017 03:42 AM
Rainmaker
1,723,580
Anthony Acosta - ALLATLANTACONDOS.COM
Harry Norman, REALTORS® - Atlanta, GA
Associate Broker

In Georgia, we close at closing attorneys office.  Earnest money will have to be deposited into an escrow account with your firm or closing attorneys.

Oct 16, 2017 09:01 PM
Ambassador
4,091,861
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

Our Contract mandates the EMD be held in Escrow. I would confirm with the REC as to whether or not you can have it held by the Seller in your state though. 

Congrats on another investment property, Nathan!

 
 
Oct 16, 2017 08:51 PM
Rainmaker
1,231,599
Mary Yonkers
Alan Kells School of Real Estate/Howard Hanna Real Estate - Erie, PA
Erie/PA Real Estate Instructor

Good suggestion from Dave Halpern 

Oct 16, 2017 07:59 PM
Rainmaker
526,755
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

In this case, I would deposit it with the title company in case the transaction goes bad and you're entitled to your deposit back.

Oct 16, 2017 07:53 PM
Rainmaker
665,753
Peter Testa
Nationwide Homes - Danbury, CT
PETER TESTA

Assuming you are referring to bank owned property, the Investor decides who holds the EDM. I am working on a bank listing now & the Title Company gets the EDM- that's what they want. If I had a choice I would give it to my Attorney before the Seller's side. 

Oct 17, 2017 05:46 AM
Rainmaker
1,027,335
Susan Haughton
Long and Foster REALTORS (703) 470-4545 - Alexandria, VA
Susan & Mindy Team...Honesty. Integrity. Results.

As our Broker reminds us, unless it's a statutory requirement,  anything is negotiable, so in my world, that means you can do what you both agree to do vis-a-vis the EMD.  

With that said, I sincerely appreciate your characterization of this guy, with one caveat:  if this deal falls apart and he keeps your money, don't come back here asking what your options are to retrieve your EMD 'cuz there is nothing people love more than to say "told you so."  

Oct 17, 2017 05:22 AM
Rainmaker
1,697,649
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg Real Estate

It should go with the attorneys or title company. Why bother doing it any other way? 3rd party

Oct 17, 2017 05:01 AM
Rainmaker
6,369,579
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

That is not the typical practice in our area.

Oct 17, 2017 04:37 AM
Rainmaker
846,275
Marco Giancola
Beachfront Realty - Miami Beach, FL
Realtor (305)608-1922, Miami Beach Florida

Not here in FL

Oct 17, 2017 04:33 AM
Rainmaker
3,069,684
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

Candice A. Donofrio nailed this one!

Oct 17, 2017 04:05 AM
Ambassador
5,214,524
Bob Crane
Woodland Management Service / Woodland Real Estate, EXP - Stevens Point, WI
Forestland Experts! 715-204-9671

Sounds like you are going without a brokerage, it would likely be to your benefit to have it in someones trust account, an attny, title co or a brokerage.

Every state is different, but I would suggest going through either a brokerage or an attny to help with the deal.

Oct 16, 2017 10:33 PM
Rainmaker
808,497
Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

I do not know about Wyoming, but EM can be released to the seller and become non-refundable in Idaho. This happens a lot with REO and New Construction, and occasionally with contingent offers or offers where the buyer wants the seller to do extensive work to the property. So unless your state has certain Earnest Money laws I would imagine you could write in that EM is to be released to the seller. In my state you would still have to be "responsible broker" and keep a ledger on what happened to it. If I were in this scenario I'd call the Real Estate Commission to make sure I was doing it all properly, documenting it the way I was supposed to, etc.

I just saw your comment under Jeff Dowler's comment. Our purchase and sale agreements say EM to be held by 1)Listing Broker 2)Selling Broker 3)Closing Agency 4)Other (with a line for explanation). 

-Kasey

Oct 16, 2017 08:19 PM
Rainmaker
526,423
Greg Large
ERA Real Solutions - Grove City, OH
A Tradition of Trust

Do you have to? No, BUT I would never recommend a party to the transaction holding the EMD, friend or not.

Oct 16, 2017 08:10 PM
Ambassador
4,494,032
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

I would feel safer with it being held with the Title company. What's in YOUR best interest! And how do contracts normally read in your state?

Oct 16, 2017 08:03 PM
Rainmaker
502,276
Susie Kay
Ultra Real Estate Dallas Fort Worth - Plano, TX
North Dallas Specialist

In Texas title is involved.  I guess you can always change any terms or words in the contract as long as both parties agree AND the attorney is the one writing the changes and not us, realtors.  We cannot cross the contract and write something to replace it.

Oct 17, 2017 01:27 PM
Rainmaker
1,361,958
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

LOL!  Pretend it's not California!  Great one!

 

I see no reason why he couldn't hold your funds.  In the olden days agents used to hold the emd check that accompanied the offer!  I'd say use an escrow company, but if you don't need one then I'd just go with letting him hold it.

Oct 17, 2017 09:31 AM
Rainmaker
1,539,634
Sheri Sperry - MCNE®
Coldwell Banker Realty - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

Candice IMO has the best answer! But more importantly, make sure your state has the same understanding. States to differ in the way they allow things to be handled. 

Oct 17, 2017 08:35 AM
Rainmaker
5,368,342
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Nathan,

I am with my California friend, Michael Jacobs   A

Oct 17, 2017 08:09 AM
Rainmaker
4,799,356
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

If you're acting in your licensed capacity, I would think you should go by the state laws.

Oct 17, 2017 08:01 AM
Rainmaker
1,444,927
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Nathan Gesner Is an EMD required in your State? If it is required, what is their minimum amout? It might be just a $1 or $10. If an EMD isn't required why bother with it at all. Since you have a mutual trust, is a good faith deposit really needed?

Oct 17, 2017 07:31 AM
Ambassador
3,001,787
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

My first thought to to check the laws in the state. Private sales may be able to transact differently. 

OUCH on the California comment ... yet they say the truth hurts 

Oct 17, 2017 07:29 AM
Rainmaker
806,827
Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

Check with local attorney.

Oct 17, 2017 07:18 AM
Ambassador
2,546,199
Fred Griffin Tallahassee Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

     Escrow money should always be held by a third party.   It's just good business practice.

Oct 17, 2017 07:07 AM
Rainmaker
1,177,659
Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
& Host of Postcards From Success Podcast

In SoCal you place it with escrow, not Title. If there is to be title insurance, I'd say yes, but Candice A. Donofrio's answer is what I suspect too. 

Oct 17, 2017 06:42 AM
Rainmaker
1,136,268
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

still thru a 3rd party

Oct 17, 2017 06:21 AM
Rainmaker
2,610,924
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

the money has to be placed in trust or governed by agreement by both

Oct 17, 2017 06:03 AM
Rainmaker
3,297,332
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

If i was buying, i would want it held with the closing company. Even no refundable deposits can be refundable if the deed is bad or something pops up. It is always better to be safe than sorry

Oct 17, 2017 05:33 AM
Rainmaker
5,570,665
Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
Previously Affiliated with The Todaro Team

In my state,  the seller (homeowner) can hold all deposit money....

some builders insist upon holding it and once all contingencies have been satisfied, it's in writing that they can use the deposit for construction.... 

Oct 17, 2017 05:01 AM
Rainmaker
605,070
Eve Alexander
Buyers Broker of Florida - Orlando, FL
Exclusively Representing ONLY Orlando Home Buyers

Buyers and Seller can write a contract on a napkin with any terms they want...including no earnest money deposit if they choose.  

Here's the big difference:

If anyone other then a broker holds escrow and there is a dispute they can release the money to who they think deserves it.  ONLY a licensed broker must notify the Real Estate commission for a decision or interplede it with the courts.

No one else has to follow any rules.

Eve

Oct 17, 2017 03:43 AM
Rainmaker
1,510,357
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • GRI • HAFA • PSC Calabasas CA

We do not wire EMD to the title but to the escrow of the sellers choice( usually), and yes, it should be something ( not necessary money and not necessary 3%), anything that both principals mutually agreed upon. 

Oct 16, 2017 11:51 PM
Rainmaker
1,525,205
Sybil Campbell
Fernandina Beach, FL
Referral Agent Amelia Island Florida

You have a lot of good answers here. As long as it is stiuplated in the contract and you are comfortable with him holding it then go for it.

Oct 16, 2017 10:38 PM
Ambassador
3,986,518
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

I have had earnest money placed with the seller and stipulated in the purchase agreement. I think a buyer and seller can have whatever agreement they want to make in regards to earnest money.

Oct 16, 2017 08:59 PM
Rainmaker
3,985,771
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

Not in Minnesota, it has to be in an interest  bearing trust account usually placed with the lisating agents Broker.

Oct 16, 2017 08:31 PM
Rainer
318,363
Melissa Jackson
Century 21 Alliance Properties - Azle, TX
Helping You Make The Right Move

I believe you have some great answers.  Using a contract, put the terms in writing & good luck!

Oct 18, 2017 09:13 PM
Rainmaker
4,021,668
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

He can hold it if both parties are in agreement. Best if he uses a segregated account, but not necessary!

Oct 18, 2017 07:32 AM
Rainmaker
355,610
Mayra Espinosa Realtor San Mateo Pacifica Homes
Mayra Espinosa Broker- Realtor| Call 650-996-8961 - San Mateo, CA
Pacifica -San Mateo,CA Real Estate agent, Buy,sell

 W do not handle Earnest Money Deposits. The buyers should wire the money into escrow or personally deliver. Great question!

Oct 17, 2017 08:01 PM
Rainmaker
906,823
Jennifer Mackay
Counts Real Estate Group, Inc. - Panama City, FL
Your Bay County Florida Realtor 850.774.6582

I'm with Candice A. Donofrio on this one

Oct 17, 2017 05:07 PM
Rainmaker
1,624,172
Sandy Padula and Norm Padula, JD, GRI
HomeSmart Realty West & Lend Smart Mortgage, Llc. - Carlsbad, CA
Presence, Persistence & Perseverance

I don't understand why you would not do so, but as Candice A. Donofrio wrote

Oct 17, 2017 03:59 PM
Rainmaker
1,707,347
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

I like a good third party and even more so dealing with friends or family.

Oct 17, 2017 03:16 PM
Rainmaker
2,013,870
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

No you should place it in your Co.'s escrow tho

Oct 17, 2017 12:50 PM
Rainmaker
831,948
Jeff Pearl
RE/MAX Distinctive / LIC in VA - Lovettsville, VA
Full Service Full Time Realtor

It's usually negotiable. You could always let the title company hold $1000.00 of it, and seller hold the other $4000.00.

Oct 17, 2017 12:03 PM
Rainer
2,750
Kevin T. Tillery Jr.
Good Buy Homes NJ - Maplewood, NJ
The agent for investors and first-time home buyers

Title company, either broker or the chosen attorney. 

Oct 17, 2017 10:39 AM
Rainmaker
572,970
Hella M. Rothwell, Broker/Realtor®
Carmel by the Sea, CA
Rothwell Realty Inc. CA#01968433 Carmel-by-the-Sea

Earnest money should be just that, skin in the game. Sounds like you are getting around that. Why even call it that? Do you actually have enough in your bank to cover that check? Sounds to me like your buyer, the guy with the heart of gold, is getting duped by a licensed person. Better call your legal hot line on this one.

Oct 17, 2017 10:39 AM
Rainmaker
4,433,483
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

No idea.

Oct 17, 2017 08:37 AM
Rainmaker
3,873,651
Richard Weeks
Dallas, TX
REALTOR®, Broker

In Texas that would be spelled out in the contract.

Oct 17, 2017 06:50 AM
Ambassador
4,312,167
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

You can place anywhere else - with mutual agreement - to best of my knowledge.

Jun 12, 2018 10:07 PM
Rainmaker
4,736,785
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

I believe with this scenario, it is up to the principals, but even knowing the character of the Seller, would still put the EM at the title company.

Oct 20, 2017 08:29 AM
Ambassador
3,021,147
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

Not in GA because we don't have title companies.

Oct 19, 2017 04:06 PM
Rainmaker
3,838,511
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

I think what you put in the contract.  I will not say what if!

Oct 19, 2017 09:44 AM