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Can the earnest deposit check be made out from my parents to the builder?

Hi everyone,

I need to put an earnest deposit down. Until I sell my home, can my parents who are willing to lend me the earnest deposit until my home sells be made out from them straight to the builder?

Thanks for everyones help.
  • September 30 2013 - Irvine
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Answers (5)

Hi It will all depends on the escrow instruction what the builder gave. I have a client who is buying Willowbend in University Park, they originally said no wire transfer, but my client is from overseas, they paid in traveler's checks, and in the end, they wire transfer the earnest money. Totally different method from the original and the builder's office saide only personal check in the begining, but you can try to explain your situation to them. Some people deposit the money to their own bank account, then write another check under the name on the purchase contract. Builders are usually not as strict on the source. 
If you are buying without a real estate agent, make sure you ask a lot of questions and ask them to explain to you in the builder's office. 
I explain every documents to my client before they sign it. It is important to know what you agree to.
  • November 25 2013
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Lender will required a Gift letter staying your parent Gift you the earnest money, they call it "Paper Trail"...  Whatever you do please be sure to track
everything you do documentation is required by the Lender.. save all receipts to.. I always tell my Buyers when we are in the buying stage please don't charge any large ticket items on credit card.. Wait till close of escrow makes it easy of your credit, keeps your  FICO score up too.. 
Good Luck on your home purchase..

  • September 30 2013
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It may depend on the type of financing you are using. Your lender can answer that question for you. It will likely include a paper trail showing it coming out of their account and deposited in to yours. Also a Gift Letter, but speak with your lender first!
  • September 30 2013
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Agreed. Best to double-check with your lender, as underwriting requirements can differ between lending institutions. 
  • September 30 2013
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Yes, but the bank/lender will require a gift letter from your parents-stating that it's not a loan and you are not required to pay them back.

Good luck!  
  • September 30 2013
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