When does a Tahoe Home Buyer make their Initial Deposit?
“When does a Tahoe Home Buyer have to make their Initial Deposit?
That question is typically followed by the following questions:
- Do you need the deposit right now to present the offer?
- I didn’t bring my check book; can I mail a check to you?
- Do you take Checks?
- Does it need to be a Cashiers’ Check?
- Can I pay electronically?
- Can I wire transfer the money?
- Do you take Cash?
These are all great questions, which are almost all addressed in the purchase contract. Here in the North Lake Tahoe area we typically use the California Association of REALTORS® (CAR) Residential Purchase Agreement (RPA) to buy and sell residential property. The CAR-RPA document will govern how and when a Tahoe Second Home Buyer will make their initial deposit and possible increased deposits.
In the CAR-RPA there is a specific provision under Item 3. FINANCE TERMS, Section A that spells out just how much the initial deposit is, and how that deposit will be paid, along with when the deposit is due.
As of 04/08/2013 it currently reads like this:
3. FINANCE TERMS:
A. INITIAL DEPOSIT: Deposit shall be in the amount of $ ____________________________.
As a buyer you and your agent will determine the initial deposit amount. In the Tahoe area that typically runs from 1% to 3% of the purchase price that is offered, but can be any amount you want to offer.
(1) Buyer shall deliver deposit directly to Escrow Holder by personal check, ◊ electronic funds transfer, ◊ Other ________________ within 3 business days after acceptance (or ◊ Other __________________).
This means as a buyer you have a choice as to how you want to make your payment to the Escrow Holder. The Escrow Holder in the Tahoe area is typically the Title Company that you have identified in the purchase contract.
You can pay by personal check, electronic funds transfer, or Other. Other might mean delivering your check by express mail, or walking it into the title company office.
Once you determine how you want to deliver you initial deposit to the Escrow Holder, then you have 3 business days, AFTER the date of acceptance to make the initial deposit, or you can select Other, meaning you pick how many days to make your initial deposit. It’s all negotiable.
There is a second option for a Buyer to make their initial deposit 3.A. (2). This second option is used when a buyer presents an initial deposit check to their agent prior to the offer being accepted. This used to be a common practice, but is rarely used today.
As a Buyer, you always have the option to negotiate something, but typically in the Tahoe area, most buyers select 3. A. (1).
As a local Tahoe REALTOR®, I recommend to my buyers to make their initial deposit directly to the Escrow Holder (title company) AFTER acceptance and to use the form of payment that is most convenient for them to make!
A few more housekeeping items when it comes to the initial deposits. I recently had a client that wanted to make their initial deposit payment in cash to the title company. As a practical matter, most title companies will not take cash, but they will take a cashier’s check.
Lastly, if you have a short escrow period, the title company may require that the initial deposit is made by wire transfer. Payment by personal check has a longer clearing period before the title company will consider the funds “good” and ready for payment to the seller.
There are many things to do when you purchase a Tahoe Second Home, and knowing when you’ll need to make your initial deposit is just one of them!
Thinking about making Lake Tahoe, California your second home? Check out the homes that are for sale here:
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All information is deemed reliable, but is subject to change, and/or correction without notice.
When does a Tahoe Home Buyers make their Initial Deposit?