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Ray
Ray, Lawyer
Category: Real Estate Law
Satisfied Customers: 38292
Experience:  Texas Attorney for 30 years dealing in real estate
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Does the term "Good Faith Deposit" as asked a title

Customer Question

Does the term "Good Faith Deposit" as asked for by a title company in the process of a home purchase mean that the title company will rush out and cash that check?
II have always understood that the check would be held until the process of purchasing was finished?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Ray replied 1 year ago.
Thanks for you question and good morning.
Here once the real estate sales contract is signed the title company cashes the check but holds it as the escrow agent and it is held in escrow until closing.If it does not close it may be refunded to you if there was no default.
The sale here is not considered complete until the check is cashed it serves as earnest money and a necessary element of a valid sales contract.
Remember they cash the check but it is being held by a neutral third party the escrow agent and has not been spent or disbursed to the seller.
But hey have to cash the check in order for there to be a valid contract.This protects you from the seller taking a different offer, say a higher one and locks in your sales contract.
Again you may get your funds back if the deal does not close and you are not at fault.The funds do not leave escrow until the deal closes.Both parties are held to the sales contract until released .
I appreciate the chance to help you today. Please let me know if you have more follow up.Thanks again.
Reference.
http://www.trulia.com/voices/Home_Buying/When_does_the_check_for_a_down_payment_get_cashed_-498103
This is perfectly normal here in Arizona.You will be credited at closing for the escrowed funds.
Customer: replied 1 year ago.
Thank you Ray, as a side note this is a VA loan. Don't know if that makes any difference.
Expert:  Ray replied 1 year ago.
Arizona licenses these guys if you have problems you can file a complaint.More reference for you here.The regs here are the same for VA loan.
http://scottsdalerealestateteam.com/the-escrow-process/
Thanks again.
Customer: replied 1 year ago.
This advice was "Top Drawer" I can't thank my advisor "Ray" enough. your service is excellent. Thank You again.
Expert:  Ray replied 1 year ago.
No problem good luck with the closing and the house.
If you can leave a positive rating here it is always much appreciated.
Have a great Memorial Weekend.