Can an Illinois Real Estate Broker legally deposit an earnest money deposit check before they have an accepted offer?

Can an Illinois Real Estate Broker legally deposit an earnest money deposit check before they have an accepted offer?

I received news from an Illinois broker that my offer on a REO was declined after 4 weeks. I requested they mail me my earnest deposit back and they stated they cashed it and the broker deposited the check already into the broker's escrow account. They stated I need to complete a form to get my earnest money back.

Can the broker legally cash an earnest money deposit before they have an accpeted offer? Anyone that would know the Illinois law on this issue, can you please reply? Thanks. Believe and Achieve! Smiling - Joe

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How we do it

I asked my Broker this question. In Arizona, it is legal for the Broker to hold the funds, but there are laws regulating this. Because of the legal issues involved, most if not all, Brokers in Arizona give the check to the Escrow Company to deposit after the offer is accepted. I always tell my clients that the check will not be cashed before we have an accepted contract. If the offer is not accepted, I return the original check to the buyer.

Al

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joe

just spoke to my fried lawyer in chicago. she said that technically he/she can, but you had to be wazrned before thzat. if you weren't notified, then you can request your money back.

yuri

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Al,

Thanks for the fast reply and information. I really appreciate it. I was kind of caught off guard by this because I thought it would not be cashed unless the offer was accepted. This opens my eyes if I make several offers and provide several checks. Thanks again for the input. Have a great weekend. Smiling - Joe

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Yuri,

Thanks for the fast reply. I was surprised and just want to know what to expect going forward. I do not want to write too many checks, because of the cash flow Smiling I also want to get my $1,000 e.m. deposit back too. Thanks again for the fast reply and have a great weekend. Smiling - Joe

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Joe..

That's a hard lesson to learn, but technically i think the broker should have never cashed the check until the offer is accepted. That's why i always send in a copy of a cashier check for ernest money when i submitted offers. In that case, when your offer in rejected, you don't have to worry about the boker cashing your check. Sorry to hear that Joe, but you should fill the paper work in an attempt to get your ernest money back. Good luck!

Lloyd


Lloyd,

Thanks so much for your input and prompt reply of information. I feel I learned a very valuable lesson today and will do it differently in the future. Thanks again for your comments and recommendation of copies of a check, I really appreciate it. Have a great weekend. Believe and Achieve! Smiling - Joe

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Not good

This is not ethical even if it is legal. You just don't do that to people in business. You become known for these types of actions.

From now on just make a copy of the check instead of giving the actual check. You can spell out the technicals of how and when the actual check will become available in the contract.

Another way you can do this is when you are making lots of offers you go to your title company and deposit the check with them....they will write a letter to the realtors letting them know that they have XXXX amount of money from you in escrow that will be available upon acceptance of offer.
Just send the letter from the title company with each offer.

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joe

I agree with Sissy. It is very unethical. On top of that, I am not sure you were informed of this broker's intentions. So, in reality, I would not work with this broker and ask for money back.

Yuri

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Not only..

Not only it was unethical, it's plain theft in my book. You should consult with an attorney to recover your deposit. This is not any different than buying a car, but the salesman keep your down payment and not giving you the car.

Lloyd


We don't hold checks if possible

Because of issues like this, my Broker would prefer that we, as Agents, don't hold checks. Unless the the seller requirs it, we don't take a check or even make a copy of one. We write in the offer, what the amount of the earnest money is, then explain in the additional comments section that the earnest money will be deposited with the Escrow Company when we have an accepted contract. The Broker does not want the liability of holding the check, nor does the Agent. (This is probably why the Broker deposited the check)

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"NOW GO FIND A DEAL"

Watch your thoughts; They become words,
Watch your words; They become actions,
Watch your actions; They become habits,
Watch your habits; They become character,
Watch your character, it becomes your destiny.

Frank Outlaw


Sissy,

Thanks for the reply and the good advice. I appreciate you taking the time to share it with me. I am suppose to meet the broker tonight to get the refund. I wil ldo things diffeently going forward and make use out of the great suggestions. Thanks again and have a great weekend. Believe and Achieve! Smiling - Joe

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Yuri, Lloyd and Al

Thanks so much for your passion and views on this. I was a little upset too but I feel I may better understand once I get my money back and understand what happened. I really appreciate everyone jumping in to help me with their thoughts and advice. I called several other local real estate offices in the area this morning to inquire about policy on escrow money and they all stated they could not answer my question. Thus, I really appreciate all of your comments and quick advice. Thanks for helping me out with this, I appreciate it and I feel better. Believe and Achieve! Smiling - Joe

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Joe

As I always say, get every little stupid thing in writing. Or, if you can't get in writing, just make sure it is discussed. It will help avoid stuff like this.

Yuri

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Joe

Hi Joe,

You might try this website called Division of proffesional regulaions. It's an Illinios site at www.idfpr.com. There is a whole lot of rules and regulations pertaining to real estate issues and along with other things. If you type in earnst money deposits in the search engine, it will pull up info on earnest monies. You can also call them. Keep me posted to what you find out. You can always call the board of realtor's or have your realtor contact inquire with them. Hope this helps. In my opinion, I can't see a realtor depositing anything until it is a binding agreement. Continued success......Lubertha

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Thanks everyone, got check back tonight! :)

The broker apologized to me this evening and stated they got my check confused with another client and reimbursed me my $1,000 earnest money check for the REO offer that was finally rejected. I accepted the apology and the check and went on my way. The entire experience taught me a lesson and I value everyone's help on the DG website. Thanks again and have a great weekend. Believe and Achieve! Smiling - Joe

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