Step 6 - Wire Earnest Money
Purchasing real estate does not need to be complicated. And it should not be expensive. Let us introduce you to Homsby, a virtual real estate brokerage that’s boldly changing the status quo. We provide homebuyers, like you, the support and services you need and want, for a flat fee. At close, we collect the commission your traditional buyers’ agent would be paid, we subtract our flat fee, and then refund you what is left over. Sound too good to be true. It’s not.
DEPOSIT YOUR EARNEST MONEY
Your Earnest Money Deposit is meant to show good faith in pursuing your contract obligations. You will have mutually agreed with the Seller to a specified deposit amount and a time-frame for which you must make this initial deposit.
Your earnest money deposit can be made physically via cashier’s check or done electronically via wire transfer. Wire transfer is the most common way to execute the deposit. Wiring funds is efficient and because it is done between regulated banking institutions, is considered "good funds." However you choose to deliver your earnest deposit, deal directly with the entity you and the Seller have agreed to conduct the escrow closing. Follow these directions before handing over any funds for your transaction.
In either situation, you will need to get the escrow number from the escrow officer that is specific to your transaction. You will want to reference this in the notes/memo section of the deposit. If you plan to physically deliver your earnest money, confirm with your escrow officer what form of payment will be considered “good funds” and obtain a receipt after making the deposit. In most cases, cash is not considered "good funds."
The most common way to make the earnest money deposit is via wire instructions. Upon opening escrow, you should request your escrow officer to send wire instructions via secured email. Your escrow officer should send to you via secured email the bank name for which the trust account is held, the banks telephone number, the account name for which the deposit will be credited, the ABA number or routing number, the account number, the reference or escrow number, and the individual for which attention should be made for the deposit.
These account details will need to be reproduced exactly when executing the wire instructions. Before executing the wire, verbally confirm the wire instructions sent to you accurately reflect your unique transaction. Confirming the details can prevent mistakes as well as Wire Fraud.
It needs to be noted here that WIRE FRAUD is a real threat that happens but can be easily avoided by confirming the details received via secured email. It is good practice to confirm the wire information with someone on the escrow officer’s team or within the escrow company who has access to your transaction details that is NOT the same person who sent the secure email directly to you. Pick up the phone and call the escrow company to do this. Similarly, the Buyer will want to confirm the details they include on their wire instructions from their account with their financial institution before sending the money into escrow to make sure the details are entered correctly. It is a simple process that happens thousands of times a day, you just want to make sure all details are correct so there are no interruptions in your wire transfer.
Once you submit your wire transfer, it can take several hours to settle. You want to be sure to make a wire transfer early in the morning to insure same day settlement. Ask your bank about their specific transfer cutoffs before initiating your transfer. Follow up with your escrow officer to let them know the funds are on their way. Request that your escrow officer send to you (digitally via email) an Earnest Money Receipt and a Wire Transfer in Receipt immediately upon their confirmation of funds being received such that you have documentation of the funds being received.
Homsby is here to guide you through every step of your transaction. If you have a question or need to seek advice, we are a click away.