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Initial Deposit Into Escrow Needs to Come From Buyer or Donor

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.

Jay Voorhees
Founder/Broker | JVM Lending
(925) 855-4491 | DRE# 01524255, NMLS# 335646