Be Careful to Whom You Give Your Earnest Money Deposit

A reader from New Brunswick, Canada, Sylvie Schriver, claims she lost her $2,500 earnest money deposit by handing it over to an individual who professed to be a real estate broker. She says the broker stole a brokerage's logo and business supplies to make it appear that he was legitimate; however, he vanished when Sylvie called to ask questions about her mortgage. When she reported the crook to the police, she then discovered that others had filed complaints. Sadly, at that point, Sylvie's money was gone.

  • Never give an earnest money deposit to the seller.
  • Make the deposit payable to a reputable third party such as a well known real estate brokerage, legal firm, escrow company or title company.
  • Verify that the third party will deposit the funds into a separately maintained trust account.
  • Obtain a receipt.
  • It is not advisable to authorize a release of your earnest money (or a pass-through) until your transaction closes.

 

A reader from New Brunswick, Canada, Sylvie Schriver, claims she lost her $2,500 earnest money deposit by handing it over to an individual who professed to be a real estate broker. She says the broker stole a brokerage's logo and business supplies to make it appear that he was legitimate; however, he vanished when Sylvie called to ask questions about her mortgage. When she reported the crook to the police, she then discovered that others had filed complaints. Sadly, at that point, Sylvie's money was gone.

 

  • Never give an earnest money deposit to the seller.
  • Make the deposit payable to a reputable third party such as a well known real estate brokerage, legal firm, escrow company or title company.
  • Verify that the third party will deposit the funds into a separately maintained trust account.
  • Obtain a receipt.
  • It is not advisable to authorize a release of your earnest money (or a pass-through) until your transaction closes.

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