Originally Posted by Minnewaska
We did haggle for a week or two, in which time the check was not cashed. I don't think the brokers want the responsibility for the actual cash, unless there is an actual deal.
The way I understand it is that the deposit check is not cashed until the closing and then it is cashed by the broker as the deposit and brokers fee is both 10%. Some however deposit the check into an escrow account.
As soon as the broker has the signed contract from the seller I believe the seller is committed. IE he can't back out of the deal without paying the 10% to the broker.
If however the buyer wants to back out, from a practical point of view that can happen anytime before the closing.
I know a guy who faxed in a copy of his deposit check. That was enough for the broker to have the contract written and signed by the seller committing the seller.
The buyer then changed his mind and bought a motorcycle. The broker was annoyed but nothing was done.
Even if the broker had a real check the guy could have issued a stop order on it as I believe they are not cashed until the closing. In any event I'm pretty sure the concept of a deposit check is mostly psychological as I doubt they are forfeited too often.
Has anyone heard of a deposit check being forfeited? It must have happened and would be a good story.