Realtor® Legal Tip – Should the listing agent verify the earnest money was actually collected?
March 4, 2020
Author: Curtis Bullock
Just had this one come up the other day and have seen it be an issue in the past. I had one situation come up where the buyer was to deliver $10,000 earnest money as per the REPC. The buyer’s agent ended up never collecting it (and didn’t disclose to the sellers agent it was never collected) and shortly before closing several weeks later the buyer defaulted on the deal and failed to close. When the seller’s agent called and asked for the $10,000 to be released to the seller she finds out the money was never collected. Not good at all.
Lesson learned on this is to verify the earnest money was actually deposited into the trust account. A seller’s agent could ask for written proof the money was deposited so there isn’t a problem later on. A buyer’s agent should also send the Confirmation of Receipt of Earnest Money form to the seller’s agent as a professional courtesy showing the money has been received.