Skip to content

Washington State Law On Earnest Money Agreement

It`s safe to say that many real estate agents view the topic of logistics and serious financial protocols as a tired discussion. In this rapidly changing market, serious money is often a secondary spectacle of the main event of price wars and multiple supply battles. Maybe so. But the broker`s inability to properly document and protect serious money is still one of the main causes of Washington State Licensing Department (DOL) discipline. This article will take into account the wisdom and challenges of “serious non-refundable money released to the seller” and buyers depositing serious money directly to the holder of the serious money so that the broker can avoid manipulating the funds. There is no one-size-fits-all approach to depositing serious money. Depositing the buyer`s funds directly into escling may be the best approach for some buyers in some transactions, but it is absolutely not the best practice for all brokers and buyers. Similarly, from a seller`s point of view, this is not good practice. If the buyer does not close, the seller can keep as serious money an amount of up to five percent of the purchase price. RCW § 64.04.005(1). While there is a common law fiduciary duty to someone for whom funds are held to be held by another, you do not want to have to appear before a judge to have that confirmed. This is the preferred practice of depositing serious funds for a real estate purchase and sale contract with a neutral third party, usually the securities company, which also provides escrow services.

Some real estate companies and contracts still allow the buyer`s or seller`s broker to hold serious funds before entering into the escling agreement. Even though the legal requirements that apply to how a real estate agent debits serious money are relatively precise, a waiver signed by both parties generally facilitates termination of the contract without litigation if a neutral third party holds the funds. Washington State also applies property tax to sales of “majority interests” to commercial entities that own real estate in the state. For a corporation, a “controlling interest” means 50% or more of the total voting shares, or 50% or more of the principal, profits or economic interest in the voting shares. For business units other than enterprises, a “majority stake” is 50% or more of the capital, profits or economic participation in the company. Honestly, you`ll probably never see that money again. But don`t worry! The deposit would be part of the entire deposit if the seller accepted your bid. (If you put 0% on a VA loan, buyers may reconsider the down payment at closing.) No. In each purchase contract, the seller is obliged to grant the buyer a marketable good in exchange for the full performance of the purchase contract by the buyer. What happens if the seller has taken possession of the buyer`s money and the seller is unable or unable to provide marketable title? This happens for a number of reasons. If the seller dies or becomes unable to work before closing, it is unlikely that the seller`s estate and/or caregivers will take the necessary steps to create a marketable title before the closing date.

It may be that a mortgage holder does not provide a timely payment, that the title company discovers a required termination title from a long-term ex-spouse, that an insoluble neighboring intervention is discovered, or that the seller was before the foreclosure when the property was listed, which is not specified in the title report, but through the fence, the seller is foreclosure and cannot close. In today`s market, the problem is often that the seller simply changes his mind. The seller, after accepting the sale, determines that the seller cannot find a replacement property and terminates the contract with the buyer. .