[HelpIamNew]

Originally a renter from NY. Moving to Hebron CT. I do not understand the home buying process. I saw a home and wanted to bid on it. The real estate agent said I would have to put down 2 deposit check made out to the sellers brokers office to be held in escrow, that would be held until closing? EX. XYZ Realty. I didn't bid. I am still looking, but I don't understand what happens when it is time to close, what does the real estate office do with those checks? Do they then cut a check to the seller? Where do my checks go? Why does the realty office hold them and not an attorney? Or do they write them out to the Sellers attorney? Of course when I ask my new york friends they think someone is trying to rip me off! Please explain, so I can go forward!

[JayCT]

I am not an expert on this (but there are regulars here that are) but we did submit a check as a token of good faith with our bid on the house we bought 15 years ago. It is to show the owner that you are serious. We only gave one check, not two and that money was held until closing when it was applied toward the cost of the house. Like I said others here may know more about this. Jay

[JayCT]

By the way, get a lawyer for this. You are about to make the most important purchase of your life and a good lawyer will answer questions like these. Jay

[jdhall1]

It's customary in Fairfield County that when you write up an offer that you submit a 1% check made payable to your real estate agent's office trustee account. That check is deposited when the offer is accepted, and you should get the money back if the building inspection went bad & you can't get a mortgage. Once the contract is agreed upon & signed by all parties, the check is then forwarded to the seller's attorney.

[renovating]

Originally Posted by HelpIamNew

Originally a renter from NY. Moving to Hebron CT. I do not understand the home buying process. I saw a home and wanted to bid on it. The real estate agent said I would have to put down 2 deposit check made out to the sellers brokers office to be held in escrow, that would be held until closing? EX. XYZ Realty. I didn't bid. I am still looking, but I don't understand what happens when it is time to close, what does the real estate office do with those checks? Do they then cut a check to the seller? Where do my checks go? Why does the realty office hold them and not an attorney? Or do they write them out to the Sellers attorney? Of course when I ask my new york friends they think someone is trying to rip me off! Please explain, so I can go forward!

I would suggest you go to the library or a bookstore and get a book about purchasing your first home. A great one is "Home Buying For Dummies"! (Not saying you are a dummy...I have it and it has a wealth of info for any homebuyer. It explains the process in very simple and understandable terms).

You should also have a real estate agent and real estate lawyer you have confidence and trust that they will look after your best interest.

Good luck!

[LindaEdelwich]

]I don’t know all the details of your particular transaction but saw this post and thought, gee I hope you get the right information so you can continue with your home buying process - the checks the seller's agent was referring to are escrow deposits. Typically when making an offer to purchase, you would make a first deposit and then typically within 10 days you would make a second deposit. These deposits by law must be held in the broker’s escrow accounts. Their disbursement at time of closing (or in the event the contract is terminated) is by agreement of buyer and seller - only.

Typically, the escrow deposit goes to the seller at time of closing.

Lets say you put down 3% of the purchase price for your escrow deposit, that money reduces what you would put down at closing - say you were purchasing a home and wanted to put down 20% total and mortgage the balance of 80%, you have already made a contribution towards that 20% thus reducing what you need to bring to closing. This is your money being put towards your purchase. No one is ripping you off.

Please know this is a general response to the question of escrow deposits and may not apply to all transactions. Each transaction is a negotiated agreement between seller and buyer and terms and conditions may be different in all cases.

Best wishes to you and I hope you are able to go forward with your purchase.

Linda Edelwich

[HelpIamNew]

Thank you all. I think I understand and what the agent I met with did make sense. I just didn't want to "sign on the dotted line" so to speak. She said since I was thinking about taking out a mortgage for more than the price of the property to cover closing costs, i could technically ask the brokers office who would be holding the first 2 checks to make the check payable back to me at closing. it is a lot to absorb.

[Rich Lee]

Originally Posted by jdhall1

It's customary in Fairfield County that when you write up an offer that you submit a 1% check made payable to your real estate agent's office trustee account. That check is deposited when the offer is accepted, and you should get the money back if the building inspection went bad & you can't get a mortgage. Once the contract is agreed upon & signed by all parties, the check is then forwarded to the seller's attorney.

It's the total opposite in the other 7 counties. The deposit and additional down payment (latter being optional) are made out the listing agency. There are no bids or binders. Your offer is made on a purchase-and-sale agreement that, when signed by both parties, becomes a contract.