Senior Smart Aleck
Join Date: Aug 2009
Location: Richmond, Virginia
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Re: What Is A Boat Really Worth?
Well, here is one practical reason for depositing the earnest money check - you will have clear funds when necessary, especially with funds drawn from a different federal reserve district.
I closed real estate and business transactions at one time, and I can tell you about all the different types of "Official Check"s, "Treasurer's Checks", "Cashier's Checks", etc. people and financial institutions will submit, even when they are told to obtain certified funds or send a wire transfer. Some checks are marked in such a way to appear to be cash equivalent, but are in fact drawn on a bank in a different federal reserve district so the maker can earn the interest until it is honored. [Virginia has had a Wet Settlement Act to force parties to advance actual cash equivalent funds or pay interest/damages to others.] You can call the bank to ask if a stop payment can be put on a particular type of check or how long before funds clear and you will receive some interesting answers.
Also, what if the contract survey contingency and all other contingencies are satisfied, the escrow agent, who didn't timely deposit the check upon ratification, now goes to deposit the check at the bank, and that same day, the buyer backs out and changes his mind. The seller now has no liquidated damages waiting for him. Oops! Who is at fault, the escrow agent for not depositing the check?
And why not deposit it, the inconvenience of having to write a check and obtain a release? The escrow agent earns a fee for a reason, and has liability in the process.
Last edited by jameswilson29; 07-30-2013 at 02:28 PM.