We often get purchases where well-meaning relatives or friends write the initial check for the escrow deposit. This invariably creates problems for us; we often end up backing out initial deposits from escrow (with the permission of sellers) and then getting buyers to write a new deposit check.
The reason is that every penny that goes into a transaction now needs to be paper-trailed. People writing deposit checks who are not parties to a transaction need to be prepared to sign gift letters and paper-trail the source of their deposit checks.
Once again – only parties to the contract should write the initial deposit check.
Founder/Broker | JVM Lending
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