Step 10: Open Escrow and Deposit Your Earnest Money
Send your deposit to the escrow or title company on time, and verify wiring instructions by phone.
Once the contract is ratified, a neutral third party opens escrow. That's usually a title company, escrow company or closing attorney, depending on your state. The escrow agent holds money and documents and follows the contract's instructions until closing.
Deliver your earnest money on time
Your earnest money is due by the deadline in the contract, often 1 to 3 business days after ratification. Common ways to pay:
- Wire transfer
- Cashier's check
- A secure e-payment link provided by the escrow company
Get a receipt. Your lender will want proof the money came from your own documented account.
Protect yourself from wire fraud
Wire fraud is one of the most common crimes in real estate. Criminals send fake emails that look like they're from the title company, with "updated" wiring instructions.
- Always call the escrow company at a phone number you found independently (not one in the email) before sending money.
- Be suspicious of any change to wiring instructions, especially at the last minute.
- Never send bank details or wire money based on an email alone.
If you think you've wired money to a scammer, call your bank immediately and report it to the FBI's Internet Crime Complaint Center. Speed matters.
What escrow does from here
- Orders the title search
- Collects payoff information from the seller's lender
- Coordinates with your lender to prepare the closing documents
- Holds the funds and records the deed at closing
Next: complete your loan application.
Your next move, by loan program
- Conventional: Keep the receipt for your earnest money. The lender will ask for proof it came from your own documented funds. Upload my documents
- FHA: FHA requires documenting the source of the earnest money, such as a bank statement showing it leaving your account. Upload my documents
- VA: VA buyers can be refunded earnest money at closing, since no down payment is required. Ask your escrow agent to show it as a credit. Upload my documents
- USDA: With zero down, your earnest money may come back as a credit or a refund at closing. Keep proof of the deposit. Upload my documents
- Jumbo: Larger deposits draw closer scrutiny. Send it from an account the lender has already seen. Upload my documents
- Investor: If you're buying in an LLC, make sure the deposit and the contract name match the entity the lender is approving. Upload my documents