An escrow letter is a formal document that states the amounts, dates and types of deposits being held by the escrow agent in a real estate transaction.
If you are the listing agent in a transaction, it is your responsibility to demand an escrow letter at each stage of the deposit collection process. This means that when the contract becomes “effective” you must demand an escrow letter from the escrow agent for the first deposit and at the time the second deposit is due, you must demand another one showing proof that the second deposit was collected. You are responsible to the property owner to make a competent effort to verify that the deposits are made on time and in the correct amounts.
I would strongly suggest that as soon an the contract becomes effective, you create a timeline of important dates and enter the deposit due dates in ACT into your client’s record with an alarm to remind you and/or into your personal agenda it’s easy to overlook these dates once you have a few deals going.
The fact that a copy of a check accompanies an offer is not sufficient and not equivalent to an escrow letter.
You should make your escrow letter request to a escrow agent on the due date of the deposit. Remember, an escrow letter is NOT due on the due date of the deposit, so you should not panic or start wars because you did not receive a letter on the deposit due date. Escrow agents are typically accommodating and provide them in a timely manner, however, if you cannot obtain an escrow letter from a cooperating agency, please advise Broker and you will be will instructed on how to proceed.
Internal Escrow Letter Request Procedure
Our responsibility for issuing Escrow Letters is solely vested in the company’s Broker as signatory to the Trust Account.
If you require an escrow letter you are to do the following things:
- Be sure you have put the contact requesting the escrow letter in ACT. For directions on how to enter a contact in ACT link here
(Remember to put the file title in the ACT field called “Account #” - Send email to Broker in the following format. Do not phone! Get all the information below and put it in coherent, neat written, readable, complete form.
Identify the following:
- Transaction Identity: (Address; Buyer/Seller)
- Name of Company:
- Name of Individual:
- Mailing Address including zip code:
- Phone Number:
- Email and/or fax number:
- Amount you think we’re holding:
- PDF the following items and attach to your email:
- copies of the check(s) tendered
- Top page of contract or Offer to Lease showing the deposit amounts involved
If you follow these instructions you will have easy closings and will be protected against accusations of negligence should disputes arise later.