TRID Q&A: How to Handle Earnest Money at Closing

Question: It is my understanding that you may not deduct the earnest money from the real estate agent's commission any more at closing. The real estate agent must bring a check to closing for the earnest money – is this correct?

Answer: There is no prohibition in the rule that prevents the deduction of the earnest money from the real estate agent’s commission. That being said, you must disclose the amount of the commission that is paid to the real estate agent, “regardless of the identity of the party holding any earnest money deposit.” Official Interpretation 38(g)(4)-4. To comply with this requirement, you should disclose the amount of the commission and the deposit/earnest money, along with the payee of these items, on the Closing Disclosure.

Have questions or issues about TRID that you need answered? Send an email to [email protected]. ALTA will address common questions/issues here on its blog.

Comments

[miriam benitez]

Can you give a copy of the buyer's closing disclosure to insurance agent, association and buyer's realtors after closing?

[ALTA Blog]

Hello Miriam,

This is a common question among title agents. We encourage you to review our blog entry that addresses this issue: http://blog.alta.org/2015/12/trid-qa-can-realtor-receive-borrowers-closing-disclosure.html

Hope this helps.

[Kathy Kygar]

WE recently sold our home. We signed the papers on a Friday and had to wait the 3 days before we received any funds. We received those funds on Tuesday following the signing. Now today (Thursday)..after it is all said and done, the Title company is asking for 2,500.00 back. They made a mistake. Isn't it too late for that, and they will have to eat that lose? Signed two very upset home sellers...:-(

[Karen Copeland]

Our lender is requiring a copy, not only of the front of the earnest money check, but the back proving that it was deposited, AND a copy of the bank statement for the account it was drawn on. I asked why, and was told it was part of the new TRID law. I have tried to find a copy of the full text of the TRID law, with no success. Is the lender telling me the truth?

[Ivan Hamlin]

The last thing any home buyer ever wants to do is put down money to buy a home and lose it, but it happens. There are many ways to lose your earnest money deposit. If you don't understand the writing process - https://www.papersbee.com/thesis/ how your deposit is handled