An escrow is the deposit of a written instrument or something of value with a third person with instructions to deliver it to another when a stated condition is performed or a specified event occurs. The use of an escrow is most common in real estate sales transactions where the grantee deposits earnest money with the escrow agent to be delivered to the grantor upon consummation of the purchase and sale of the real estate and performance of other specified conditions.
Washington Escrow Agreement for Sale of Real Property and Deposit of Earnest Money
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How to fill out Escrow Agreement For Sale Of Real Property And Deposit Of Earnest Money?
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Earnest money protects the seller if the buyer backs out. It's typically around 1 3% of the sale price and is held in an escrow account until the deal is complete.
The provision requires buyer to deliver earnest money within two days following mutual acceptance. Buyer must deliver within two days following mutual acceptance regardless of whether buyer is delivering to buyer's broker or to escrow.
For most situations, when the sales contract or purchasing agreement is signed, the earnest money is issued. But it may also be added to the deal. After deposit, the funds are usually held until closing in an escrow account, at which stage the deposit is added to the down payment and closing costs of the buyer.
(b) "Earnest money" means money placed with a holder by a prospective buyer of residential real property to show a good-faith intention to perform pursuant to an executed purchase and sale agreement. (iv) A title insurance agent licensed pursuant to chapter 48.29 RCW.
Earnest money is usually due within three days of a signed and accepted offer. The earnest money check can be wired to an escrow account, or delivered to the seller's agent. It's important to get that money to the seller as soon as your offer has been accepted.
Earnest money deposits are usually 1% to 3% of the total sale price of the home, although the exact amount can depend on the market.
First, it is important to understand the basic operation of Form 21, paragraph b, the statewide form provision that controls the deposit of earnest money. The provision requires buyer to deliver earnest money within two days following mutual acceptance.
In an escrow agreement, one partyusually a depositordeposits funds or an asset with the escrow agent until the time that the contract is fulfilled. Once the contractual conditions are met, the escrow agent will deliver the funds or other assets to the beneficiary.
There is no standard requirement amount for earnest money deposits in Washington State. It's really up to the seller and the buyer. Some sellers request a specific dollar amount, but most just wait and see what the buyer has to offer.
If the inspection reveals major flaws within the structure of the home, and the buyer is no longer comfortable continuing with the deal, the buyer can notify the seller in writing and expect a full refund of the earnest money deposit.