How to Write a Check for Earnest Money

Earnest money demonstrates a buyer’s serious intent and commitment to a real estate purchase agreement. This deposit, typically made to a third-party escrow agent, signifies good faith in a transaction. It assures the seller of the buyer’s genuine interest and provides protection if the buyer defaults.

Gathering Essential Details

Before writing an earnest money check, gather all specific information required from your ratified purchase agreement. The exact payee, typically a neutral third party like an escrow or title company, or the seller’s brokerage, must be confirmed from the contract. This ensures funds are held securely and properly accounted for.

The precise amount of the earnest money deposit must be obtained directly from the purchase agreement. This amount is generally a percentage of the purchase price, often 1% to 3%, but is always a specific dollar figure. Using the exact contractual amount prevents discrepancies and potential delays.

Include the full property address in the memo line of the check. This helps the recipient associate the check with the specific real estate transaction. Proper identification ensures clear record-keeping for all parties. The check should also be dated with the current date to reflect accurate timing of the deposit.

Step-by-Step Check Completion

Write the current date in the designated date field at the top right of the check. This includes the month, day, and full four-digit year. Ensure the date is accurate, as it records when the earnest money commitment was made.

On the “Pay to the Order of” line, write the full, exact legal name of the payee as specified in your purchase agreement. This name must match precisely, whether it is an escrow company, title company, or real estate brokerage. An incorrect payee name can cause significant delays.

In the small box to the right of the payee line, write the exact numerical amount of the earnest money deposit. Write the dollar amount clearly using numbers, followed by a decimal point and cents. For instance, if the amount is $5,000, write “5,000.00” in this box.

Below the payee line, write out the exact dollar amount in words on the long line provided. Begin writing at the far left to prevent alterations. For example, if the amount is $5,000.00, write “Five thousand and 00/100” dollars. This written amount confirms the numerical value and serves as a legal safeguard.

On the “Memo” or “For” line, clearly write the property address that the earnest money relates to. This helps the receiving party quickly identify the purpose of the funds and correctly apply them to the transaction. Including this detail is crucial for proper accounting and avoids any confusion.

Sign your name on the signature line in the bottom right corner of the check. Your signature authorizes the bank to release the funds from your account. Ensure your signature matches the one on file with your bank to prevent any processing issues.

Submitting Your Earnest Money Check

After completing the check, make a copy of both the front and back for your personal records before submission. This documentation provides proof of payment and includes all the details you have written. Keeping a copy is a prudent financial practice for any significant transaction.

Deliver the earnest money check according to the instructions in your purchase agreement or from your real estate agent. Common methods include hand-delivering the check to the real estate agent, escrow company, or title company office. Secure mail or a wire transfer might be acceptable alternatives, but direct delivery is often preferred for immediate confirmation.

Adhere strictly to the timeframe for earnest money submission specified in the purchase agreement. This period is typically very short, often within one to three business days after the contract’s effective date. Timely submission ensures compliance with contract terms and keeps the transaction progressing smoothly. Obtain a written receipt or an email confirmation upon delivery of the check.