Escrow agreement for cash deposits & binders

Handling cash deposits on your home:

An Escrow agreement is an agreement between Buyer and Seller as to the disposition of a cash deposit or down payment on the purchase of a home or other real estate.

Escrow agreements are most often used for an "earnest money" deposit, also known as a "binder".  The Buyer makes out a check to the Seller but gives the check to a third party named in the Escrow Agreement. 
 
This third party (usually the Buyer's real estate agent or the Seller's attorney), holds the deposit and turns it over to the Seller or returns it to the Buyer based on conditions set in the Escrow Agreement. For Example:

• If the Buyer is unable to get a mortgage loan, the deposit is usually returned.
• If the Buyer changes his mind about purchasing the property, the Seller gets to keep the deposit or binder.

Handling escrow deposits is one of the things a real estate agent does for his fee; the agent provides the Escrow Agreement and fills it out with himself as the third party who will hold the cash deposit. 

This is a handy document to have when selling your home without a real estate agent. You can name your lawyer, the buyer's mortgage broker, or even a neighbor as the person to hold the deposit.

Escrow Agreements are available at major office supply stores such as Staples and Office Depot.  They are also included with our For sale by owner kit which can be downloaded to your computer.